Credit and debt news
Rate hikes hit home
1 May, 2007
March figures for high street banking have shown that the interest rate hikes are starting to take effect, as mortgage demand weakens in the face of even further raises
Year on year though the gross mortgage lending was up by 5 per cent to hit £18.6 billion, whilst the number of mortgage approved fell by 8 per cent to 198,000. Credit card borrowing also fell by £0.1 billion (net) in March, however levels of borrowing on personal loans and overdrafts stayed the same.
Director of sales and statistics for the British Bankers Association (BBA), David Dooks, said: “Strong levels of gross mortgage lending reflect homebuyers and homeowners seeking out fixed rate mortgages as protection against rising interest rates.
“However in the last two months net lending has risen less sharply and, compared to the same time last year, the number of mortgages approved in March was lower, indicating that weaker demand is starting to emerge.
“As people continue to reduce their commitments, weaker spending on credit cards and lower new loan borrowing than a year earlier led to another overall fall in personal borrowing.”
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