Northern Rock’s lending surges
A return of first-time buyers was in part responsible for a jump in mortgage lending at Northern Rock, as the firm announced a good start to 2006.
In its interim results, the lender announced that its 2006 post-tax attributable profit will reach £352 million, up 14 per cent from last year.
It said this increase was partly due to the fact that first-time buyers were returning to the market, and that it expected this “gentle trend” to continue throughout the year, leading to a “slight increase” in housing transactions.
It also predicted an increase in remortgaging. It said that as households continued to reorganise their finances, demand for remortgage products would remain high, and that remortgaging would represent around 45% of gross lending in 2006.
And it said that these factors meant that the UK housing and mortgage markets would be worth around £300 billion in 2006, compared with £288 billion in 2005.