You are here: Home - News -

Drop in mortgage lending confirms market slowdown predictions

  • 01/10/2000
  • 0
July saw a dip in mortgage lending, with gross advances falling 6.1% from the previous month, confir...

July saw a dip in mortgage lending, with gross advances falling 6.1% from the previous month, confirming reports of the predicted slowdown in the mortgage market.

According to the latest DETR/CML figures, gross lending fell back from £11.4 billion in June to an estimated £10.7 billion in July, with loans for house purchase at £7.1 billion sinking from £7.7 billion in the previous month.

The average fixed rate fell to 6.37% from 6.31% in June while the average new variable rate rose to 6.07% compared with 6.03% in June. This perhaps explains why variable lending was less popular falling 3% to 64% of all loans taken out in July.

Bernard Clarke, communications manager at the CML, said: “The latest figures show that variable rates were much less popular in July and more people were choosing fixed rates because in borrowers’ minds there is more chance of interest rates going up before they come down.”

Building society gross advances rose from £2.21 billion to £2.23 billion while new mortgage lending by the Major British Banking Groups (MBBG) totalled £6.8 billion compared with £7.5 billion in June.

David Dooks, director of statistics at the British Bankers Association (BBA), said: “The reduced demand for both mortgages and remortgages has occurred because more people are choosing equity withdrawal or home improvement loans on the back of their rising home values, because they are cheaper than personal loans and credit cards.”

“However, there is still plenty of activity in the housing market. Competition for business is as strong as ever. Lenders are releasing new products almost every week and people are going to move their mortgage to a different product if it is cheaper,” said Dooks.


There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
IFA confidence boosted as 60% report steady increase in mortgage business

By Rachel Williams Research commissioned on behalf of the ZIFA Mortgage Network has confirmed that I...