Mortgage lending may have peaked

The Building Societies Association says that despite a record February, mortgage lending has reached a plateau and may not climb to new highs for several months.

Last week, the association reported that society gross advances amounted to 4,214m this February, up from 3,183m in February 2006. And the Council of Mortgage Lenders says that last month was the biggest February ever with lending hitting a whopping 24.6bn.

Adrian Coles, director-general of the BSA, warns: “These are strong figures but we may be seeing the peak of the market. The recent base rate rises are still to work through fully in the mortgage market. Lending figures might become a little more subdued as the year progresses.”

He adds: “A reasonably strong economic outlook should ensure there is still demand for mortgages, just not at record highs.”