Lending slows further as higher interest rates begin to bite
Posted on 19 July 2007
There has been a further slowdown in mortgage lending, according to the Building Societies Association (BSA).
Figures for June show that gross advances increased slightly over the month, but that rising mortgage repayments led to a fall in net advances, from £1,261 million in May to £1,178 million. In June 2006 net advances were £1,894 million.
Mortgage approvals – loans that have been agreed but not yet made – fell from £4,739 million in May to £4,693 million in June. Approvals are seen as a good indicator of future lending, and this is the second consecutive month in which they have decreased.
Commenting on the figures, Brian Morris of the BSA said: “Although 2007 started strongly, it seems the impact of successive interest rate rises is now being felt and is affecting affordability.
“Borrowers should be careful about overstretching themselves at this time of rising interest rates and take on new borrowing only if they are sure they can afford to service it.”
Category: Mortgages
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