THE RECENT drop-off in mortgage activity may be over, new figures from banking groups have shown.
The British Bankers' Association says the market for home loans appears to be stabilising after becoming gradually weaker over the past six months. It has published figures showing that net mortgage lending rose by £4.5bn last month – in line with th
e average increase for the period since October and signalling the "market clearly has some inherent strength which is underpinning demand."
Further evidence of a stabilising property market was provided by the Council of Mortgage Lenders (CML) which said lending for house purchase was up 14 per cent to £8bn, with first-time buyers accounting for a third of all loans.
The CML said total mortgage lending was also higher – up 13 per cent at £20.1bn – as activity picked up following the seasonally quiet months of January and February.
Expectations
CML director general, Michael Coogan, said homeowners should be alert to a further rise in interest rates, with two members of the Bank of England's monetary policy committee favouring a hike to five per cent in March.
But he added: "The market remains stable, and on course for the 'steady as she goes' scenario that we envisaged when we published our forecasts at the beginning of the year.
"The looming General Election may result in a short-lived lull in activity, but overall the market is likely to continue performing in line with expectations."
The Building Societies Association (BSA) also saw a pick-up in lending in March with net advanced totalling £781m compared with £602m in February. Adrian Coles, director-general of the BSA, said: "The figures suggest that the decline in mortgage activity has come to an end."
