Mortgage lending defies rate rises through July

Mortgage lending stayed strong through July as homeowners borrowed £34.4 billion in total, the latest figures from the Council of Mortgage Lenders (CML) reveal.

Although this figure represents a slight slowdown from June's lending figure of £34.8 billion, mortgage lending in July was nonetheless 13 per cent higher than one year previously.

The continued appetite to borrow seems to suggest that homeowners are looking to borrow and buy at the earliest opportunity, concerned that the house market could become yet more impenetrable to entrants.

The British Bankers' Association (BBA) director of statistics David Dooks described the BBA's own statistics, which show a rise in net mortgage lending of £5.7 billion for July, as "surprisingly" strong.

Expectations were for mortgage appetites to begin to cool in the light of the "cumulative impact" of five interest rate rises in the last year, he commented, but these seem to have done little to curb mortgage borrowing.

Nevertheless, figures from the Building Societies Association (BSA) this week showed that mortgage approvals in July fell by more than a third compared with the same period in 2006, suggesting that interest rates may be beginning to dampen the market.

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