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Mortgage Lending Continues to Rise

Written By On 20/02/2014

In the UKís most formidable start to a year for six years, mortgage lending rose to £15.5 billion last month according to the Council of Mortgage Lenders.

It was up by approximately a third on the same month last year, but nevertheless was a decrease of 8 per cent on the previous month of December. However the CML say that is quite normal over this time of the year.

The trade association for the residential mortgage lending industryís data is made up of loans that have actually been granted to purchasers to buy their property, so therefore should indicate a true reflection.

The Council are predicting lending levels this year to increase to fifteen per cent gradually because of the economic situation, whilst economists say the report confirms their belief that property prices will go up considerably in the near future.

The associationís chief economist Bob Pannell does not forecast properties to increase quite so quickly though, even if the last quarter's average monthly property approvals reached seventy thousand - the most robust for six years.

Mr Pannell said:

The Bank of England envisages that approvals may climb to ninety thousand a month in the second and third quarters. Unless the bank is expecting cash purchases to fall away sharply this would seem to imply property transactions running for a while at an annualised rate of 1.5m or so.

But last yearís mortgage lending was still way down in comparison to the highs of 2007 when the CML released lending figures of £362.8 billion for the year. The total mortgage amount loaned for the twelve months up to December 2013 was £176.4 billion which is under half.

A few days ago the Royal Institution of Chartered Surveyors reported that most of its members predict an annual six per cent price increase for the next five years owing to a shortage of supply in the market.