(1888PressRelease)
May 21, 2007 - Recently released data from the British Bankers' Association (BBA) shows unsecured personal lending dropped by £200 million in March - following on from a similar decrease recorded in February.
David Dooks, BBA's director of statistics, believes it is the Bank of England's recent rate hikes that are behind the mortgage market's downturn.
"Since interest rates began rising last August, higher mortgage costs have been absorbed by households and high lending growth continued, to keep up with rising prices," Mr Dooks said.
"In the last two months, demand has moderated a little and, with no short-term prospect of costs reducing, mortgage lending growth should ease further in the months ahead."
"Higher mortgage costs for households are no doubt a factor in the subdued demand for unsecured borrowing."
Interest rates were increased by 0.25 per cent in each of August, November and January.
