Gross mortgage lending has reached a new record for the month of July but falls slightly behind June, according to the Council of Mortgage Lenders.
Another survey, released today by the Building Societies Association, shows that building societies are lending less compared with July last year.
The latest CML data shows that gross lending for July 2007 reached £34.4bn, 13% higher than July 2006 and just 1% less than the £34,847 of lending made in July.
Commenting on the findings, the CML says: “Mortgage lending remains robust despite the five interest rate rises since last August - although we have yet to see the full impact of higher rates. Lending is currently being fuelled by a large number of people remortgaging to better deals in case rates go any higher.”
Building societies seem to be feeling the pinch of higher interest rates already with gross lending down from £4,888m in July last year to £4,465m last month, an 8.7% decrease.
Adrian Coles, director general of the BSA, says building societies have seen total lending fall as they are lending more responsibly and aren’t lending large sums to people who will not be able to pay them back.
He adds: “As mortgage payments increase, household finances are likely to be squeezed further. Even if interest rates are near to their peak, potential borrowers need to think about all of their outgoings to make sure they do not overstretch themselves financially.”
However, savers have been putting more money aside and building societies have benefited from net receipts of £723m in July 2007, a 62.8% rise compared with the same period last year.
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