THE BOOM in mortgage lending ground to a halt in August as lending volumes slumped to a 12-month low, industry data showed yesterday.
A total of 41,588 loans were given out last month, according to the British Bankers’ Association.
Lending by value is still up by 15 per cent on the year to £11.1bn, but analysts believe the slowdown can be attributed to more than just a usual summer slump.
“With housing market activity moderating from its early-2014 highs, we believe house prices are likely to generally rise at a more retrained restrained rate over the coming months,” said economist Howard Archer from IHS Global Insight.
“More stretched house prices to earnings ratios, the prospect that interest rates will start to rise before long (albeit gradually) and tighter checking of prospective mortgage borrowers by lenders will likely have some limiting impact on buyer interest.”
Meanwhile, business lending did begin to edge up, rising £1.5bn in the month – the first increase since September of last year.