Mortgage lending in 2006 was its highest ever in the UK as gross lending by building societies hit £52.8 billion, the Building Societies Association (BSA) has revealed.
But BSA director-general Adrian Coles expects the succession of quarter-point interest rate rises in August, November and January to curb borrowing in 2007.
Declining lending rates and loan approvals over the later months of 2006 suggested rate rises had already begun to have an impact, he suggested.
"Net mortgage lending from building societies has declined from recent highs in the past few months and in December was down year on year by 32.3 per cent," he noted.
Mortgage approvals in December set a record for that month on a year-on-year comparative basis – but were still lower than highs witnessed earlier in the year.
But Citizens Advice senior policy officer Sue Edwards is concerned to see interest rates curb mortgage borrowing with immediate effect.
In 2006, Citizens Advice bureaux dealt with 20 per cent more housing debt problems, which include mortgage repayment difficulties, than in 2005 – with 770,000 people revealing in September that they had missed at least one mortgage payment in the previous 12 months.For more information about mortgages, click here.
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