Mortgage lending still 'robust'

Borrowers are still busy despite higher interest rates

Mortgage lending is still rising at a "robust" rate, says the Council of Mortgage Lenders (CML).

Its latest figures show that lending reached £34.4bn in July, despite five increases in interest rates in a year.

Although the new lending was down slightly from that in June, it was still 13% higher than a year ago and was a new record for any July.

However the CML warned that the full impact of the rate rises would become evident this autumn.

"Mortgage lending remains robust despite the five interest rate rises since last August - although we have yet to see the full impact of higher rates," said the CML.

"Lending is currently being fuelled by a large number of people remortgaging to better deals in case rates go any higher," added a spokesman.

Surprising

The continued buoyancy of borrowing by home owners was reflected in figures from the British Bankers' Association (BBA).

July's strong rise was surprising, given the expected cumulative impact of higher interest rates David Dooks, BBA

Its members, who account for roughly 60% of all UK mortgage lending, said that net lending, which takes into account repayments by mortgage holders, rose by another £5.7bn in July.

"July's strong rise was surprising, given the expected cumulative impact of higher interest rates," said David Dooks of the BBA.

"This was higher than the £5.4bn recorded in both the previous month and the recent monthly average," he added.