Mortgage lending 'starts to ease'

Posted: 20 Jun 2007 10:44:27 GMT

New figures have suggested that the latest interest rate rise is beginning to have the desired impact on the property market.

New figures have suggested that the latest interest rate rise is beginning to have the desired impact on the property market.

Figures released by the Council of Mortgage Lenders (CML) have found that mortgage lending during May began to cool, with the impact of four interest rate rises since August last year seemingly taking effect.

However, the year-on-year figures demonstrated a five per cent increase on the May 2006 figures, meaning that this year's figure of £30.6 billion was a new record for May.

Despite this, the five per cent increase on last year represented a downturn, with previous months having shown an average year-on-year growth of between 12 and 15 per cent.

Michael Coogan, CML director general, explained: "While today's lending figure is a new record for the month of May, it does indicate that the market is slowing down following the rapid and sustained growth we saw last year."

He added: "Going forward we expect lending to ease as we progress through the year, but the market will remain in good shape."


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