Interest rate rise looks likely
Recent mortgage lending data has shown the number of new mortgages approved in June (most recent month for statistics) increased by 4%.
Recent mortgage lending data has shown the number of new mortgages approved in June (most recent month for statistics) increased by 4%. Approximately £10 billion worth of new loans were taken out during the month, representing a 6% increase compared with May.
This suggests that after initially appearing to dampen the market in April, the government's new "affordability criteria" tests will not be enough to prevent house prices from rising. Consequently the Bank of England may find itself under pressure to increase interest rates in response to the improved economy and the strong rise in the number of people in work.
In the light of previous comments by Mark Carney (the Governor of the Bank of England ), any rise in interest rates is likely to be gradual, but none-the-less should be taken into account when considering whether to purchase.
