Mortgage demand moderating?

Latest data from the BBA British Bankers' Association shows that mortgage demand may be moderating. Net mortgage lending in March rose by an underlying £5.1 billion. This was unchanged from the slightly downwardly revised increase the previous month, but lower than the monthly average of £5.5 billion over the previous six months.

Unsecured personal lending meanwhile fell by £0.2 billion in March, similar to the fall in February. Credit card borrowing accounted for £0.1 billion of the fall, with loans and overdrafts virtually unchanged. Deposits from the private sector rose by £8.1 billion 0.8% to £970 billion.

Elsewhere, personal deposits increased by £3.7 billion, slightly higher than the average growth of £3.2 billion over the previous six months.

David Dooks, BBA director of statistics, said: "Since interest rates began rising last August, higher mortgage costs have been absorbed by households and high lending growth continued, to keep up with rising prices. In the last two months, demand has moderated a little and, with no short-term prospect of costs reducing, mortgage lending growth should ease further in the months ahead.

Despite the BBA figures newly released numbers from the CML Council of Mortgage Lenders show gross mortgage lending reaching a March record of £31.3 billion. This was a leap of 22% from February's lending figure of £25.5 billion and is 10% higher than the £28.3 billion of lending reached in March last year.

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2007-04-23 11:28:36 © Moneyextra.com