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news.bbc.co.uk
Mortgage lenders call for rate rise
People are still borrowing even as house prices rise
Mortgage lenders have called for a rise in UK interest rates for the first time in their history.
Expressing concern at the current over-excited condition of the property market, the Council of Mortgage Lenders (CML) said that "a modest rise in interest rates now would help ensure that the housing market is sustainable in the future."
As borrowing has continued to grow rapidly, defying constant predictions of a reversal, some lenders have become concerned over clients' ability to meet their obligations.
At the British Bankers' Association (BBA), chief executive Ian Mullen added: "Consumers' enthusiasm to take advantage of current low rates in the mortgage market is still as strong as ever."
The warnings came as the CML showed that the market was continuing to grow at a blistering pace.
Total lending was a record £19.5bn in May, nearly one-fifth more than £16.4bn in April, the CML said.
Meanwhile, the BBA said mortgage lending rose by £5.25bn in May, compared with £4.6bn in April - the fourth record in the past five months.
Low interest rates and low unemployment have helped sustain demand for new houses - and there are calls for higher interest rates to cool consumer enthusiasm.
Housing rush
Last week, a survey of house prices suggested that the first signs of a slowdown in the property market were on the horizon.
The Royal Institution of Chartered Surveyors said that while house prices were still continuing their upward trend, the rate of increase had stabilised for the first time in three months.
However, Monday's data indicates that "the housing market still has further upside to go," George Buckley, economist at Deutsche Bank, said.
Separately, both Lloyds TSB and HBOS - the merged Halifax and Bank of Scotland - said their mortgage businesses were performing well, providing a fillip to banking shares.
HBOS, Britain's biggest mortgage lender, expects "very strong sales" of new mortgages in the first half of this year
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