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Modest upturn in lending levels reflects changes in sales market

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  • 01/02/2001
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The level of mortgage lending rose in November with gross lending rising to £10.4 billion compared w...

The level of mortgage lending rose in November with gross lending rising to £10.4 billion compared with £9.9 billion in October, according to the latest figures from the CML/DETR.

Lending for house purchase climbed slightly from £6.1 billion in October to around £6.5 billion in November and the level of remortgaging remained constant at £3.2 billion. Peter Williams, deputy director general of the CML, said: “November’s figures bears out the CML’s view that the housing market has entered a steady period. Modest increases in lending are forecast to be accompanied by house price rises of around 6% in 2001.

The average new fixed rates fell from 6.41% to 6.25%, while the average new variable rates dropped from 6.14% to 6.07%. Fixed rate loans accounted for 31% of new loans taken out compared with 33% in October, and consequently there was a slight increase in the popularity of variable rate loans in November, rising to 69% of new lending.

The latest figures from the British Banker’s Association (BBA) show that mortgage lending rose by just over £2 billion, which was the largest monthly rise since August. Tim Sweeney, director general of the BBA, said: “Following two months of relatively lower growth in the major banks’ mortgage lending, November saw a return to the higher trend of the summer months.”

The Building Society Association (BSA) also reported growth as gross advances amounted to £2.3 billion in November, up from £2.2 billion in October. Adrian Coles, director general of the BSA, said: “The steady rise in building societies’ gross advances for the third month in a row reflects recent industry reports of an underlying upward trend in house prices. After a period of slight uncertainty earlier in the year, it seems confidence has returned to a higher level in recent months.”

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