The Money Stop

Lending in the UK reached record levels during 2006, with the Council of Mortgage Lenders (CML) saying there was a 20 per cent rise on 2005.

In total, £346 billion was lent, with November proving to be the year’s most popular month for borrowing.

In fact, November was a record-breaker itself, recording the highest lending figures ever at £33.1 billion.

The huge lending figures have been attributed to a number of factors, including annual house price growth (around seven per cent) and increased house sales (14 per cent).

“The commentators who thought the housing market would crash in 2006 were wrong,” said Michael Coogan, director general of the CML.

“Last year the market proved itself to be in robust shape and we expect it to remain so during 2007.

“Going forward, many of the key drivers of the market remain positive. The economy is healthy, demand for housing is strong, and house prices continue to rise. As a result, mortgage lending this year is expected to be even higher than in 2006.”

Despite Mr Coogan’s positive outlook for the housing market during 2007, he does have a word of warning in light of the recent interest rate rises.

“The recent increases in interest rates might make many aspiring home-owners think twice about getting on to the property ladder, and we expect to see levels of activity dampen as the year progresses,” he added.

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