Renewed property market confidence? mortgage lending rises |
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Thu, 21 Jul 2005 10:35
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There might be some piece of good news for the housing market. The British Bankers' Association (BBA) and Council of Mortgage Lenders (CML) showed figures that suggested a substantial rise in the number of mortgage loans taken in June, implying a restoration of confidence in the property market as well.
As per the CML, total mortgage lending had soared to touch £25.8bn this June against a lower £22.3bn in the previous month in May. CML further notified that the property purchasers seemed more confident regarding a home purchase as loans taken for buying property had conspicuously risen by 20% in June. Similarly, the BBA proved net mortgage lending levels also increasing by £4.6bn in June from £100m in May.
A significant point that came across CML’s figures was that a rapid rise in mortgage lending to property purchasers had been noticed instead of an inclination towards remortgaging.
In spite of lending for home purchases growing to £11.9bn in June from May’s £9.9bn, this amount was even now £2bn less than the figures recorded at the same time last year.
However, CML reiterated the fact that buyers were viewing house purchases more confidently now than some time back when the property market slowdown had cast a dark shadow on people’s property purchases.
CML’s director, Michael Coogan commented, “Lending for house purchase is on the increase which indicates improved buyer confidence matched by sellers' realistic price expectations.” Meanwhile, the BBA disclosed that consumer credit levels had also gone up with borrowing on credit cards stepping up by a whopping £300m in June, which was more than two-fold of £117m in May. Still, this growth in debt was lower than the figures posted over the years 2003 and 2004 that almost made the entire country seem smitten by the debt bug.
BBA’s director of statistics, David Dooks explained that low consumer spending was being reflected in the general market due to which the credit card and overdraft market also remained “subdued”. Figures at BBA endorsed the fact with a good £993m shoved off into savings accounts in June this year against £554m last year at the same time. In fact, this amount has been the biggest amount put into savings accounts ever since 1997.
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