Mortgage lending up ten per cent on a year ago
Monday, 20 February 2012 2:45 PM
Gross mortgage lending continued its slow recovery in January with loans 10 per cent higher by value than a year ago, at £9.5bn.
The Council of Mortgage Lenders (CML) said the 14 per cent fall on December 2011 was an expected seasonal decline and pointed out that January was the sixth month in a row of higher year-on-year lending.
Last year was also the first since 2007 to see an increase in gross mortgage lending, with a four per cent rise on 2010 to £140.7bn.
The increase in 2011 was generated by a 17 per cent rise in remortgage lending. House purchase lending actually fell by four per cent.
However, the CML says the underlying trend in housing market transactions improved through the year but only showed up as year-on-year gains in the final months.
It says that activity may be boosted in the short term by first-time buyers looking to complete deals before the end of the stamp duty holiday on 24 March.
And for the moment funding conditions have eased because of European Central Bank operations, reducing the need for UK banks to tighten mortgage pricing and terms.
CML chief economist Bob Pannell said: "Should inflationary pressures continue to fall back, the squeeze on household finances should ease progressively and help support stronger economic recovery going into the second half of the year. This can only be good news for the housing market further down the track."
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