Figures indicate cooling of mortgage market
According to recent figures that have been released in the UK, the mortgage market could be going through a cooling period, with far fewer people now taking out mortgages. In fact, the number of people taking out this type of finance is said to be at its lowest point in two years according to the data, which comes from the British Bankers' Association. Compared to around forty five thousand people taking out a mortgage in January 2006, the figure for the same period this year was around thirty seven and a half thousand.
According to a spokesperson for the British Bankers' Association: "January saw a continued stable demand for mortgages. Actual borrowing on mortgages remains strong compared with this time last year, so the impact of higher interest rates has yet to feature. Prudent repayments, particularly on credit card accounts, are keeping the unsecured credit picture very subdued."
However, although the number of people taking out mortgage loans has taken a tumble, the actual amount that has been borrowed in the form of mortgage loans has actually risen. This is because, although there are fewer people borrowing, the ones that are taking out the loans are having to take out higher loans in order to cover the rising cost of properties in the UK. Some of the reasons for the drop in the number of people taking out mortgages are thought to be the extortionate cost of purchasing a property in many parts of the UK, as well as the spate of interest rate rises over the past six months.
Interest rates have been hiked up by the Bank of England three times since August 2006, and now stand at five and a quarter percent. In August the interest rate was four and a half percent.
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