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The mortgage market may be about
to boom again amid increased competition and the possibility of
lower interest rates, say banking experts. New mortgage lending
by the major British banking groups totalled 6.1 billion in January,
according to the British Bankers' Association. Although this was
4% down on December's figure, it was 31% above the amount lent by
the major banks in January last year.
Tim Sweeney, the BBA's director
general, says the figure bucked the seasonal trend and proved the
strength of the major banks' mortgage lending. ``January usually
sees much weaker lending than in the months leading up to the end
of the preceding year, but this January has turned out only marginally
weaker,'' he says. `
`With lower interest rates on the
way and competition intensifying, the market could well take off
in the coming months, particularly if remortgaging continues in
its current strong vein.''
A total of 34,959 loans were approved
for remortgaging loans in January, totalling 2.3 billion, 50% higher
in number and 80% higher in value than the corresponding figure
last year.
The upbeat prediction comes as new
figures show that house prices picked up in February. Halifax's
monthly report says prices rose by 1.6% in February, against the
previous month, and were up 3.4% on the year. The bank says the
outlook for the housing market is positive and demand is expected
to be supported by a sound economic background, lower interest rates
and affordability levels that are not stretched.
Halifax says the average house price
in February was £87,109 - which compares to Nationwide's figure
of £83,314. It says the increase it had seen in prices in January
and February followed a modest fall during the final quarter of
last year.
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