Last month’s gross mortgage lending figure was the greatest monthly estimate since October 2008, rising by 9 per cent to £17.6 billion, according to the latest figures from the Council of Mortgage Lenders.
The figure was also a significant year-on-year increase, up 37 per cent from the £12.9 billion recorded in October of last year.
Commenting on market conditions, CML chief economist Bob Pannell observes: “Housing activity is set to strengthen further in the short-term, and to contribute materially to overall economic growth.
“Combined with the Bank of England’s recent optimism about the economy, this has led some commentators to speculate that an early rate rise may be on the cards. We do not currently share this view, which we believe underplays the importance that the MPC attaches to a secure recovery before raising rates.”
David Copland, director of mortgage services for LSL’s financial services division said, “The CML’s figures are testament to the success of Help to Buy 1 and the Funding for Lending Scheme as they continue to fuel the housing market recovery.
“The launch of Help to Buy 2 has had a positive effect with new enquires increasing and, even though there are only two lenders participating, the fact is that consumers now believe there is a chance of obtaining a higher LTV mortgage. With more lenders launching high LTV mortgages up to 95 per centwithout participation in the Help to Buy scheme, new business activity which will permeate through to mortgage completions in the New Year is fuelling a healthy pipeline.
“As more lenders launch their help to buy product ranges in the New Year this will further stimulate borrowers’ expectations. The only caveat will be the amount of housing stock on the market. Many potential movers are holding off selling their property as there is not enough stock currently on the market to encourage them to buy.”