CML: Signs of slowdown in mortgage lending
In spite of gross lending continuing to hit new records, some £30.6 billion in May of this year, the Council of Mortgage Lenders (CML) has reported indications the growth rate is slowing.
Year-on-year growth, which had been in a range of 12 to 15 per cent for the past few months, fell significantly below double figures to five per cent in May.
Recent interest rates rises, where the Bank of England placed them at 5.5 per cent, were seen as one of the main drivers behind the slowing of demand.
The CML still expected to hit a record for the year in gross lending at £360 billion for the year, but with many expecting further rate rises demand could continue to be put under pressure.
"Going forward we expect lending to ease as we progress through the year, but the market will remain in good shape," said Michael Coogan, director of the CML.
The Royal Institute of Chartered Surveyors warned that buyers should exercise caution when taking on mortgage debt in the current climate of interest rate rises.
"The current squeeze on disposable incomes will continue, making affordability levels deteriorate even further," senior economist Oliver Gilmartin said.
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