Mortgage debt of 1 trillion is no reason for concern

Drew Wotherspoon of John Charcol says the news that mortgage lending has broken through the 1 trillion barrier is not worrying.

He says: While 1 trillion in mortgage debt is a huge sum, when you consider the fact that there is an unmortgaged property wealth of around 3.6 trillion, this means that the UKs loan-to-value is a mere 22%, which is healthy to say the least.

While the amount of mortgage lending has been pushed up by the boom in house prices, there is little to suggest that consumers are saddling themselves with mortgages that they cannot afford.

Approval figures for May are at record levels, proving that despite previous fears of a crash in house prices, the market has picked itself up and the appetite for home ownership among consumers is firmly back on track.

I see no reason for this confidence to subside and would anticipate its continuation for the remainder of this year.