Mortgage lending set to ease off says CML

The Council of Mortgage Lenders (CML) has revealed that lending figures are set to cool as interest rates take hold, despite statistics showing that total lending increased in May.

Over £30 billion was lent in May – a new record for the month and a 12 per cent increase on April's figure – but the five per cent year-on-year growth is significantly below the 12 to 15 per cent reported for the first few months of 2007, the CML has advised.

"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," advised CML director general Michael Coogan.

"Going forward we expect lending to ease as we progress through the year, but the market will remain in good shape. Although further interest rate rises will continue to dampen demand, we are still on course to meet our prediction of a record £360 billion of lending during 2007," he added.

"Although lending has edged up on the previous month the early summer always sees an increase in transaction activity, meaning we should not read too much into the monthly change," added Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors.


© Adfero Ltd