Building society gross mortgage advances have increased for the second
consecutive month, rising to £2.66bn in June from £2.37bn in May.
The Building Societies Association says the rise is due to mortgage rates
being at their lowest levels for 30 years. But it stresses the market is
not gearing up for a 1980s-style housing boom, dismissing fears of
overheating and subsequent collapse on the grounds that many regions are
experiencing very little demand for property.
Its monthly figures show the number of approvals dropped to £2.75bn in
June from £2.88bn in May.
The amount of money invested in building societies fell to £706m in June
from £1.05bn in May. But the BSA says £440m was ploughed into cash Isas in
June, bringing the total invested in building society cash Isas to more
The association points out that only £1.7bn was invested in building
society Tessas in the whole of 1998.
Director-general Adrian Coles says: “The current health of the market
reflects the affordability of house purchase at the moment with mortgage
rates at their lowest for decades. This should not be interpreted as a
1980s-style housing boom.”
Mortgage Brief, p33