Mortgage UK -> Articles -> Biggest Increase in Mortgage Lending

According to the British Bankers Association the housing market remains balanced having increased by its largest amount over the last two years.

Underlying mortgage lending rose by approximately £5.4 billion in March, which is said to be the biggest increase sine June 2004.

House price inflation dropped buy relatively massive 1% from 1.1% in March down to just 0.1% in April. This makes the national average house price now at £160,000+. This shows that house price growth has fallen below 5% to 4.8% in April from 5.3% in March.

These figures show that the price of the average house has risen by about £7000 in the last year. That’s the equivalent of a £20 a day rise in the last 365 days.

However, now that the inflation figures have dropped these house prices are said to come into a cooling down period during April, but this was expected due to the surge in house prices in last month in March. With conditions remaining quite firm there does not seem to be underlying reason for worry as the overall picture appears to be healthy.

Most lenders expect to see continued instability in the coming months, but they do not expect the Bank of England to change interest rates dramatically to change the market up or down. Another factor which may affect the price of the housing market is that of oil. The price per barrel of crude oil hit an all time high during April and is equally affecting the price of petrol at the pumps. This in turn will have a great impact on consumers pockets and minds. Generally prices of every household will be increasing due to rising utility bills such as gas, electricity and water. These combined issues are said to create a mild weakening of the housing market, rather than creating a mass panic situation.

On the other side of lending the British bankers association data showed that consumer credit, personal loans, overdrafts and credit card lending took a downturn in March compared to February. This is good news for the one trillion pounds worth of national debt, but not so good news for lending firms.