Lending set to slow

Mortgage lending is set to slow down after reaching record levels during July, a bankers' group said today.

According to the British Bankers' Association (BBA), total new lending by the major banking groups was ?10.98bn during July.

The figure was boosted by first-time buyers getting on to the property ladder and home owners remortgaging to take advantage of low repayment rates being offered by banks.

Once redemptions and repayments were taken into account, loans increased, in seasonally adjusted terms, by a record ?3.5bn up from increases of about ?3.15bn in both May and June.

But the BBA said the increase in mortgage lending might now have reached its peak, with the pattern in previous years suggesting that demand would "moderate" towards the end of the year.

BBA chief executive Ian Mullen said: "Customer appetite for new mortgage products was strong in July and consequently the major banks' higher lending reflected an increase in their share of the mortgage market.

"However, looking ahead, demand may be peaking.

"Though approval numbers for remortgaging continued to strengthen, those for house purchase or equity withdrawal were slightly lower than in June."

The BBA's figures exclude mortgages advanced by building societies.