Mortgages slowing down due to rising interest rates

30/05/2007

New data has indicated that mortgages will slow down simply due to high interest rates.

The 2007 April figures showed a much slower annual increase than 2006.

Nearly 65,000 people carried out a loan for buying their home during April, this indicating a drop of around 10,000 from the previous month, figures revealed.

17.3 billion was the data represented for the gross mortgage lending for April, a climb of 12 per cent April period (2006).

Director of statistics at the BBA, David Dooks said: "The latest three months have seen net mortgage lending stabilise, with rates - albeit still around £5 billion a month - below the average of the previous six months.

"The picture from approvals points to mortgage demand weakening further as as the year progresses and the cumulative effect of higher interest rates bites harder."

Chief UK and European economist at Global Insight Howard Archer, said: "Mortgage approvals for house purchases moderated to 64,815 in April from 75,098 in March.

"Although mortgage approvals were actually up 1.0 per cent year-on-year in April, this was largely because approvals had dipped markedly in April 2006.

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