Oliver Gilmartin, senior economist at the Chartered Institution of Chartered Surveyors: "With less than 50 per cent of the increase in base rates over the past year being passed onto mortgage borrowers (via the effective mortgage rate) it is not surprising that mortgage lending has remained so strong during the seasonally strong summer months. Record borrowing levels will only add to the concerns at the Bank of England that higher interest rates will be necessary to curb consumers appetite for debt.
"However, the continuing rise in longer term borrowing costs means that fixed rate mortgage deals are becoming increasingly costly and this will start to have a more material impact on borrowers as we move into the winter. Even so, the strength of the employment picture will remain a key support for the housing market."
Warren Bright, chief executive of propertyfinder.com: "Strong mortgage data shows that the housing market has so far held up well in the face of higher interest rates, although the full effect is still to be felt. Our forward-looking survey data on the outlook for house prices shows that confidence is slipping, but from very high levels, suggesting a deceleration in house price growth rather than price falls are the most likely outcome. The housing market does not need any further interest rate increases."
John Kilgallon, mortgage manager at Abbey: "Our experience with regard to total lending volume, as you'd expect, is in line with the CML's figures. What is interesting though is the types of products that people are choosing in the current rate environment. This time last year, the split was 50-50 between tracker and fixed rates. Not surprisingly as the year went on, and interest rates rose, by the second quarter this year it had changed to nearer 80-20 in favour of fixed rates. Significantly though, we are beginning to see the mix shift back. More people mortgaging or remortgaging with us today are opting for variable rates, which suggests that people think that rates are at or near their peak and will start to drop again in the not too distant future."
Stephen Leonard, director of mortgages at Alliance & Leicester: "The CML mortgage lending figures shows record lending of £32.4bn in June, a nine per cent increase compared with May. It is a clear indication that borrowers have moved their house purchase decisions forward to April and May in anticipation of the recent rate rises. The planned introduction of HIPs in July and the increased number of sellers on the market may have further contributed to this early peak in house buying.
"The housing market is still performing at a healthy level but we should expect house price inflation to level off towards the end of 2007."
