Despite the ‘credit crunch’ affecting the market, statistics from the CML indicated that gross mortgage lending grew to £32.4 billion in October 2007, rising from £30.6 billion from the October 2006 results.
The figure also represented a 6 per cent increase from the September findings. However, the organisation admitted that the figures reflected the applications and approvals undertaken before the ‘credit crunch’ crisis and expected a downturn in future figures.
Michael Coogan, director-general at the CML, admitted that a Base Rate reduction would help to instil confidence among borrowers, but indicated a continued period of market uncertainty into the New Year. He said: “The next few months will be testing as ongoing pressures in financial markets feed through into the wider economy. Funding constraints will continue to restrict lending activity and make loans more expensive.”
However, David Bexon, managing director of SmartNewHomes.com, expected continued growth, albeit at a slower rate than previous years. He said: “I believe that 2008 will be a more positive year for the new homes market and I predict an average price increase of between 2 per cent and 3 per cent for new homes over the next year.”
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