UK mortgage market remains strong - commercial mortgages

15 October 2007

Despite a recent hit in confidence in the mortgage and financial markets the fundamentals of the UK mortgage market are very sound according to the Intermediary Mortgage Lenders'' Association (IMLA).

Peter Williams, executive director of IMLA, says: "The turmoil in the financial and mortgage markets was attributable not to an actual problem with the credit quality of UK mortgage books, but concerns among investors that UK lenders could encounter the same problems as have occurred in the US. That ignored the fact that the credit quality of UK mortgages remains very good."

Mr Williams added that while house price inflation is falling and will continue to do so into 2008, aggregate demand continues to exceed supply.

Indeed, IMLA said recent RICS figures that indicate that house prices are beginning to cool should not be interpreted as an early indication of a house price crash

Employment remains high, interest rates remain historically low - despite recent volatility - and the economic backdrop remains positive," Mr Williams said.