Mortgage lending increased to its peak

19/07/2007

Mortgage lending last month rose to record levels, simply because borrowers were getting ready for the next interest rate increase, CML, Council of Mortgage Lenders reveals.

During June gross mortgage lending peaked at £34.2bn, showing an increase of 9 per cent on the last month when homeowners remortgaged to offsets.

CML's director general, Michael Coogan said: "Despite the record level of mortgage lending, there are signs that the market is feeling the cumulative effects of the five interest rate rises we have seen over the past year.

"This effect will become much more evident in the coming months as borrowers with fixed-rate mortgages come off their existing deal into a significantly higher interest-rate environment."

During June period unsecured lending remained unchanged, as a £0.5bn decrease during May. £0.1bn drop in borrowing via credit cards was negated by a £0.1bn increase in the value of overdrafts and personal loans.

Household saving constantly rose, leaving large deposits into banks increase by £3bn over a time period, in conjunction with latest monthly average of £3.1bn.

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