May Mortgage Lending In 2007 'Peak'

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Article Title: May Mortgage Lending In 2007 'Peak'
Author: Abbi Rouse
Category: Loans, Mortgage, Mortgage
Word Count: 507
Keywords: loans,credit,debt,secured loans,cards,personal loans,mortgage,real estate,homeowners
Author's Email Address: abbi.rouse@inter-financial.com
Article Source: http://www.articlemarketer.com
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Mortgage lending peaked over the course of last month, the publication of a new set of figures has indicated.

According to a study released by the British Bankers' Authority (BBA), some 19.7 billion pounds was issued via secured loans over the course of May - the highest level of new business recorded since November. The growth was partially attributed to "strong remortgaging activity" during the month.

Throughout May, 204,800 mortgages were approved - an increase of two per cent from the same month in 2006 - accounting for a total of 24.2 billion pounds. Meanwhile, the average approved secured loan per house purchase was reported to amount to 157,100 pounds up by 13 per cent from last year's figures.

David Dooks, the BBA's director of statistics, said: "Contrary to the recent stable trend, the banks' gross and net mortgage lending strengthened in May, reflecting an improved competitive position, rather than a general rise in mortgage demand across the market. And, because of strong approvals in May, the banks' higher market share is likely to continue over the next couple of months."

Mr Dooks added that as credit card borrowing declines, Britons appear to "prefer to pay up front rather than borrowing to spend" as retail sales increase.

Meanwhile, borrowing via credit cards and personal loans and overdrafts was reported to have decreased by 0.4 and 0.1 billion respectively during the month. The BBA reported that 7,418 million was put on credit cards over the course of May - a fall of 3.4 per cent from figures recorded during the same time in 2006. Following seasonal adjustment, borrowing via overdrafts and personal loans decreased by some 54 million pounds.

Figures released by the association also showed that although the number of house purchase and equity withdrawal approvals both decreased in number last month, the respective value of each product increased.

Commentating on the BBA figures, Oliver Gilmartin, senior economist for the Royal Institution of Chartered Surveyors, claimed that they strengthen concerns by the Bank of England's monetary policy committee (MPC) that the price growth in the property market has been "resilient" over the course of this year. He pointed out that a rise to the base rate is "guaranteed" to take place during next week's MPC meeting. "Many indicators point to a slowing housing market in recent months with house price inflation expected to slow sharply into the Christmas period," Mr Gilmartin added.

Earlier this month, research carried out by the Council of Mortgage Lenders (CML) revealed that money issued via secured loans hit a record in May. According to the CML, some 30.6 billion pounds was lent out over the month, the most ever recorded for a May and up from April figures by 12 per cent.

However, despite the record figures noted last month the council claimed that borrowing growth is beginning to slow. May's lending figures were reported to be some five per cent higher than those during the same time in 2006 - however in the preceding months' year-on-year growth was said to be generally between the 12 to 15 per cent barrier.

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