Mortgage lending near three-year high

4 January 2007

Mortgage approvals have climbed to the highest level in nearly three years, according to new figures from the Bank of England.  It says lenders approved 129,000 mortgages in November last year, which is the highest figure since the end of 2003.

Figures show that the amount of money lent in the form of mortgages during November was the second-highest on record – at £9.8 billion pounds.  According to the Bank, the record value for monthly mortgage lending was set in September 2003, at just under £10 billion.

Analysts say these figures support evidence of strong house price growth and point to a steady housing market in 2007.

However, some economists are warning that the housing market might cool off during 2007, following November’s rise in interest rates.

Howard Archer at Global Insight said:  “We suspect that with so many people stretched to the limit in buying a house, even a modestly small cumulative rise in interest rates will ultimately have a substantial dampening impact on housing market activity.”