Industry figures from the Council of Mortgage Lenders (CML) revealed that borrowing in December was up by a substantial 49% in comparison to the previous year, amongst reports of a surge in demand for fixed rate mortgage products.
CML figures showed that UK Banks and Building Societies lent approximately £17bn in mortgage funding during December, with gross lending over the final quarter of last year reaching £52bn, which was reflective of a 38% increase on the same period a year before, and a 5% increase on the third quarter of the year.
Despite traditional trends for mortgage lending to curtail in the fourth quarter of the year, analysts advocate that the launch of the second phase of the Government’s Help to Buy scheme has prompted a substantial surge in demand for mortgage funding, as buyers with small deposits are given a helping hand onto the property ladder.
Commenting on the figures, Bob Pannell, Chief economist at the CML, said that prospects for the short-term growth of the housing market and the wider economy looked “very positive.” He said “Mortgage lending was stronger than we expected in the closing months of 2013, but lenders expect little if any boost to borrower demand this quarter.”
Pannell stated that whilst the Government’s Help to Buy scheme is certainly accountable for some of the gains in mortgage lending in the final quarter of the year, there are a broad range of factors which contribute to the positive impact on the UK economy. This includes an improvement in the job market and consumer confidence, plus a boost in the number of competitive mortgage products on the market.
The figure for gross mortgage lending in December last year reflected the highest for that calendar month since December 2007. The lending figure, which does not account for the amount of being paid off in separate net lending figures, was estimated to be £176.7bn, which is the highest since 2008.
In correlation with the rise in mortgage lending last month, house prices also increased substantially in 2013. Contractor mortgage lender Halifax estimated a 7.5% rise in prices over the year, whilst Nationwide Building Society estimated 8.4%.
Steve Clements, a Senior Mortgage Consultant at Contractor Mortgages Made Easy said “Whilst certainly a positive improvement, the CML’s annual figure for mortgage lending remained below a normal market of around £240bn, particularly in comparison to the height of the market in 2007, where lending peaked at £362bn”.
Article By: Jon Sheilds, Media Executive at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
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