Gross mortgage lending in December reached an estimated £11.7 billion, according to the Council of Mortgage Lenders. This brings the estimated total for the year to £143 billion, up from £141 billion in 2011. In 2013, the CML forecasts gross lending will reach £156 billion.
Commenting on market conditions in this month’s Market Commentary CML chief economist Bob Pannell observes: “We are more positive about the UK housing market and wider economy than a year ago, despite economic headwinds and downside risks.
“A key reason is that lenders currently face few funding pressures, in part reflecting the funding for lending scheme.
“House purchase activity was robust in the fourth quarter, on the back of better mortgage availability and pricing, and we expect this to continue over the coming months.”
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said the figures point to a stable momentum in the marketplace.
“Finishing the year with a total of £143bn may be a modest improvement on 2011, but what matters most is that the conditions are now in place to make a significantly bigger leap over the next twelve months.
“Mortgage credit is now more easily available, and the continuing product price drops mean that consumers have the luxury of choosing between some of the most appealing fixed rates we have seen since before the recession hit. It is especially promising to see this galvanizing borrowing across the market, so that whether you are making a new purchase or remortgaging an existing property, there are some particularly attractive options on the table.
“Our latest National Mortgage Index also suggests that applications for purchase mortgages were noticeably higher last month than they were in December 2011. With new products appearing, we share CML’s optimism that the appetite for mortgage borrowing is returning to something approaching good health.”
Peter Williams, Executive Director of IMLA, said the positive outlook is for 2013 is justified; “Given that activity dropped off by £1.5bn between the third and fourth quarters of 2011, an improvement of £176m in the CML figures over the equivalent period last year marks the start of what should develop into a more substantial recovery in 2013.
“As demand returns and the Funding for Lending Scheme gains momentum, it presents lenders with a real chance to develop new product offers that can meet consumers’ varying needs. With innovation being key to gaining an advantage in the market, IMLA members will be at the forefront of this effort and the resulting competition should give brokers plenty of options to consider for potential borrowers.”
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