Mortgage lending up 18% year-on-year

Mortgage lending in April 2007 was 18 per cent higher than during the same month last year, the latest figures show.

The Council of Mortgage Lenders said that mortgage lending reached £28.8 billion in April, although this was a fall from the £31.7 billion in lending that was seen in March.

Lending in 2007 is still expected to be four to five per cent higher than last year, the organisation stated.

It claimed that if the figures were seasonally adjusted, they would show that lending had kept within a relatively narrow range this year and would show a "relatively stable picture".

CML director general Michael Coogan commented: "Lending is still strong, but it does seem to be stabilising in 2007 following its major growth in 2006. With higher interest rates now beginning to have an impact, the modest slowing in activity that we have been expecting over the rest of the year looks set to materialise."

Meanwhile, figures from the Building Societies' Association revealed that mortgage approvals were eight per cent lower in April than a year earlier, as the effects of interest rate rises began to show.

Recent research from Paragon Mortgages found that nearly a third of landlords are reacting to increased interest rates by raising rents, 43 per cent say that they are taking no specific action as a result of the higher base rate and 12 per cent are responding by increasing their involvement in buy-to-let.

Landlord Mortgages “indeed rents are increasing as the property transaction levels decrease. It is only a matter of time before Landlords pass on the extra cost of borrowing.”

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