The gross amount of money lent for home purchases in Britain rose to its highest level in 34 months in April as interest rate cuts tempted buyers into the property market, according to the Council of Mortgage Lenders.
Total gross mortgage lending, which includes remortgaging of old loans for fresh ones, was £12.6 billion sterling, compared with 12.2 billion in March and the highest monthly rate since CML records began in June 1998.
Of that total new loans rose 5.3 per cent from March to eight billion pounds while remortgaging fell slightly to 3.8 billion pounds, from 3.9 billion pounds in March. Further advances and top-up loans contributed a further 800 million pounds in April.
Reductions in interest rates have come at exactly the right time to stimulate the normal Spring upturn in the housing market, said Bob Pannell, CML's head of reasearch and analysis.
The Bank of England trimmed its benchmark repo rate by a quarter point in both February and April and has since made a further quarter point cut in May, lowering it to 5.25 percent. May's cut in base rates should help the housing market remain buoyant over the coming few months, although further ahead modest income growth is expected to curb the potential for renewed rapid house price growth, Pannell said.
The number of loans for house purchases in April totalled 107,000 compared with 103,000 the previous month.