Mortgage lending starts to slow

Could a housing market slowdown be around the corner?

The mortgage market is slowing a little following four interest rate rises since August, lenders have said.

The Council of Mortgage Lenders (CML) said total lending in April amounted to £28.8bn - 18% higher than a year ago, but down on the previous month.

Lending was "stabilising" after a period of major growth, said CML director Michael Coogan.

At the same time, the British Bankers' Association (BBA) said the growth in mortgage lending had slowed in April.

High house prices and increasing monthly repayment costs are causing a slowdown in the mortgage market David Dooks, BBA director of statistics

According to the BBA net mortgage lending, which strips out the effect of repayments, rose by £5bn in April.

The previous month, net mortgage lending rose by £5.1bn, while the recent monthly average has been £5.4bn.

"High house prices and increasing monthly repayment costs are causing a slowdown in the mortgage market," said David Dooks, BBA director of statistics.

Many analysts have predicted that the mortgage market will slow during the course of 2007 as previous interest rate rises start to have an effect on borrowers.

The BBA added that during April credit card borrowing fell by £143m, while personal loans and overdrafts rose by £155m.