Average household debt in the UK has continued to rise but mortgage approvals in the UK nonetheless increased once more during May, new figures have revealed.
The continued mortgage lending boom seemed to suggest that the housing market would not be slowing dramatically between now and the end of the year.
The figures from the British Bankers Association (BBA) showed that 81,298 mortgages were approved last month, 20 per cent up on the same period of last year.
Gross mortgage lending, including remortgages, stood at £18.2 billion over the month, up 27 per cent on May 2005.
More money was repaid on the nations credit cards than was borrowed but unsecured borrowing was up by £699 million over the month.
“The housing market is still very robust. Demand is strong at the moment,” commented economist Howard Archer of Global Insight.
He added that World Cup spending provided a more temporary blip in consumer borrowing.
“We suspect this could well prove to be a temporary burst of energy from consumers, as significant problems remain regarding their longer-term health,” he said.
“Indeed, record high debt levels, rising unemployment and increasing pension concerns means that there is an increased need for many consumers to try and improve their balance sheets.
“This need would be heightened if the Bank of England raises interest rates any time soon.”
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