Tuesday 11th July 2006
A senior Lloyds TSB economist has commented on the current interest rate rise uncertainty and consumer confidence.
Jeavon Lolay said that the publics reaction to wide speculation over a rise in interest rates was to "get ahead" of hikes with a fixed-rate mortgage.
He said that consumer confidence in the housing market did not appear to be knocked, with purchasers happy that prices would remain high.
Consumer debt may be a possible cause of current high lending figures, he suggested, as people re-mortgage their properties in order to contain and manage their debts.
Mr Lolay said that this pattern was good news for the long term forecast: "If re-mortgaging is picking up and people are getting more confident, they are likely to spend some of this money. They will use some of it as savings.
He added: "This is a signal of confidence that house prices are going to be maintained."
Recent figures from the Council of Mortgage Lenders (CML) show that re-mortgaging in May grew by 17 per cent compared to the same month last year.
The CML says the leap in re-mortgaging reflects the re-financing of a high number of fixed-rate deals now coming to an end.
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