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People on the struggle for new mortgages

27/02/2007

People who choose to take on a loan for a new property had dropped to the lowest level for 2 years in January. This is simply because house prices are rising and people are choosing a different option.

The BBA – British Bankers Association stated that the total gross mortgage lending increased to £16.6 billion during the month; this is 15% greater than £14.5 billion January 2006 period.

Two years ago the figures showed that 45,039 were taking on a new mortgage, this figure today has dropped to a stunning 37,804.

In January the common size of loan for a house was £146,700, this is 16% more than a year sooner. BBA feel that due to high interest rates and house prices taking on a mortgage is becoming harder for people today.

Director of statistics at BBA, David Dooks said: "January saw a continued stable demand for mortgages. Actual borrowing on mortgages remains strong compared with this time last year, so the impact of higher interest rates has yet to feature."

He also spoke further: "Prudent repayments, particularly on credit card accounts, are keeping the unsecured credit picture very subdued."