HOUSING MARKET COOLING

According to CML (Council of Mortgage Lenders) mortgage lending growth is beginning to slow. With an increase of 12% from April to May, and up by 5% compared to May of last year, surprisingly the growth is toning down. This is evident, as the annual rate of growth for the first months has been bet between 12% and 15% and for May, only 12%.

The slowdown, according to experts, is owed to the increase of borrowing cost as a result base lending rate hikes. Another contributing factor to the slowdown is the 10% to 11% home market inflation, as revealed by two independent studies.

A third contributing factor, according to British Banker’s Association BBA, is the general trend of decreasing debt accumulation and orientation towards the repayment of old debt. For the previous month, BAA observes, repayment of debt has overtaken credit purchases as total amount.