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Mortgages stable over first four months

Wednesday 23rd May 2007

The first four months of 2007 have seen stable lending of mortgages, it has emerged.

Seasonally adjusted figures to April show approval of new mortgages has remained within a "relatively narrow range", according to the Council of Mortgage Lenders (CML).

However, while total lending in April was down nine per cent on that in March, the CML stressed that the data still constituted the highest mortgage lending on record for the month.

The council suggested that with four base rate rises since August 2006, three of which occurred since November, affordability concerns could be responsible for the decrease in mortgage applications.

Michael Coogan, director general of the CML, said: "Lending is still strong, but it does seem to be stabilising in 2007 following its major growth in 2006.

"With higher interest rates now beginning to have an impact, the modest slowing in activity that we have been expecting over the rest of the year looks set to materialise."

But Mr Coogan advised that growth of about five per cent on 2006 data may still be expected over the course of the year.

Following the most recent rate rise, independent mortgage broker John Charcol suggested that Britons may wish to remortgage to limit the impact of higher repayments.

Katie Tucker, product specialist for the firms online presence Charcol.co.uk, said: "The process of remortgaging can be seen as a real chore to some homeowners and many often leave thinking about it to the last minute."

"It is more crucial than ever for any borrowers whose mortgage is due to fall on to the lenders standard variable rate ... to really do their homework to make sure they move on to the right deal," she added.

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