Mortgage lending hits seasonal record

Posted: 14 Feb 2007 10:12:08 GMT

Overall mortgage lending rose to a seasonal record during December despite falling 14 per cent from the all-time high of £33.2 billion seen in November, new figures show

Overall mortgage lending rose to a seasonal record during December despite falling 14 per cent from the all-time high of £33.2 billion seen in November, new figures show.

The Council of Mortgage Lenders (CML) statistics showed that £28.6 billion was outstanding on mortgages in December, traditionally a slow month in the market.

Despite the income multiples borrowed by first-time buyers rising to a record high of 3.31, the numbers entering the market grew 19 per cent over the course of 2006.

New property owners accounted for 36 per cent of all mortgage applications, a one per cent increase on 2005, although this is likely to slow following recent rate rises said CML.

"Although the mortgage market performed extremely well in 2006, the effect of rising interest rates and the continuing decline in affordability are likely to dampen activity somewhat in 2007," said head of CML Michael Coogan.

"The monthly figures clearly show the cumulative effects of the gradual worsening in affordability for first-time buyers - and the ever-rising proportion of them who are caught by stamp duty."

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