Following the UK Finance lending update this morning, Richard Pike, Phoebus Software sales and marketing director, said “The correlation between the gross mortgage lending figures, which were down, and the number of approvals, which were up across the board, is quite telling. As house prices fall, especially in London and the south east, and house buyers also look farther afield into more affordable areas, this gap is only likely to widen. It is, however, encouraging to see the increase in approvals for home purchase, which does show that people have had enough of sitting on their hands and are making their move.
“The level of unsecured lending has been rising consistently over the last few months. This does give cause for concern as it perhaps shows that there are a great many people living on credit to meet their basic needs. This type of credit is more easily attainable and, without security, does put more vulnerable borrowers as risk.”
“As the latest inflation figures went over the 2% target set by the government there have been questions as to whether the Bank of England will consider an interest rate rise. However, it is probably a little early to think that. There are many factors and, given the latest upheaval in Westminister, there is a lot of dust that needs to settle before that particular decision has to be made. So in the meantime, those that have had enough of standing still will benefit from the continued low-interest environment.”