Analysts warn of decrease in mortgage demand

The British Bankers’ Association (BBA) has warned of a possible slowdown in the levels of mortgage lending.

While levels of mortgage lending showed an increase during August, analysts have predicted that signs are already present to indicate an imminent decrease in demand, and have highlighted that approvals for new loans were ‘noticeably lower’ during the July-August period.

However, such indications can be interpreted as being indicative of the expected seasonal trend, as demand for mortgages traditionally falls to a lower level in the autumn months.

However, during the period of August, major banks also reported a slower-than-expected rise in consumer credit of £837 million, a figure which confirms a gradual downward trend in the levels of personal lending.

Concerns have also been voiced over the potential long-term effects of the US terror attacks on consumer confidence, which could lead to greatly reduced activity in the housing sector. (CL)