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Cheap mortgages drive home loan market stability

Date: Wed, 29 Jun 2005

The growing number of good mortgage deals is helping to ensure a stable home loan market.

Figures from the Major British Banking Group suggest that mortgage lending is recovering despite the slowdown in house prices.

The group reported that lending increased by two per cent on April but remains eight per cent lower than at the same point in 2004.

"Levels of loan approvals fluctuate with seasonal patterns, but the volumes we are seeing suggest that a fairly stable lending picture will continue in the near term," said David Dooks, British Bankers' Association director of statistics.

Lenders have been keen to remain competitive amid fears that the housing market could be heading for a slump and therefore mortgage rates, especially for first-time buyers and buy-to-let offers, have continued to be low.

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