Building society mortgage lending “highest ever”

Mortgage lending from building societies has hit its highest-ever level, reaching £52.8 billion in 2006, it has emerged.

The Building Societies Association (BSA) said that the figure could be partly caused by last year’s two increases of the Bank of England’s interest rate.

And it may suggest that mortgage lending will be robust during the early part of 2007, Adrian Coles, director general of the BSA, remarked.

He continued: “The strength of the housing market could have been one of the factors which influenced the Bank of England’s decision to put rates up last week.”

Currently standing at 5.25 per cent, the national interest rate was increased in January 2007 by the Bank of England’s monetary policy committee, which raised the rate for the third time in six months.

However, Mr Coles argued that January’s rise would eventually feed through and dampen demand in the housing market.

© Adfero Ltd

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