Tuesday, July 20, 1999 Published at 10:30 GMT 11:30 UK
Business: The Economy
Housing boom continues
UK mortgage lending rose to its highest level in six years - further evidence of the strength of the housing market.
Mortgage lending in June totalled £11bn, up 21% compared to the previous month and 31% higher than the level one year ago.
Mortgage interest rates have fallen sharply since the Bank of England cut rates by 2.5% to 5.0%.
"With headline mortgage rates at 30-year lows and a range of competitive deals available to lower the up-front costs for home owners, the housing market is likely to show a healthy and sustainable rate of growth for the foreseeable future," said Michael Coogan, Director-General of the Council of Mortgage Lenders.
Remortgages have accounted for an increasing proportion of lending, with borrowers taking advantage of lower rates to refinance their mortgages. In June it made up 31% of total mortgage business, compared to 25% one year ago.
But he denied that there was any danger of over-heating, as housebuyers were now having to pay an increasing proportion of their income to cover mortgage payments.
There was a big increase in total lending in by banks in June, which soared by £6.7bn compared to a revised increase of £2.1bn in the previous month.
Part of the increase was accounted for by a corporate restructuring at a major UK bank, but lending to private individuals also grew strongly.
As well as the increase in net mortgage lending, consumer credit increased by 554m as customers returned to the high street.
Credit card advances grew by £254m compared to £135m in the previous month.
But lending to manufacturers was still weak, growing by only £33m.
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