Mortgage lending at its highest level since 2008

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Gross mortgage lending rose by 8% in 2015, with an estimated total for the year of £220.3 billion. This is the highest annual gross lending figure since 2008, according to the latest figures from the Council for Mortgage Lenders (CML).

In December 2015 alone, the CML estimates that gross mortgage lending reached £19.9 billion in December 2015. While this is 3% lower than November at £20.5 billion, it is 23% higher than December 2014 at £16.2 billion.

Gross mortgage lending for the fourth quarter of 2015 was an estimated £62.3 billion – a 1% increase on the third quarter and a 23% increase on the fourth quarter of 2014.

CML economist Mohammad Jamei says: “The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals have all helped to underpin demand.

However, Mr Jamei believes there will be limited opportunities for growth in the housing market over the short term.

He says: “The supply of existing and new properties on the market remains weak, and affordability pressures weigh on activity. There is an added element of uncertainty as we wait to see the impact of tax changes on the buy-to-let sector.”

House prices continue to rise, says Halifax.

‘We expect the market to settle down from mid-March’

Commenting on the CML figures, Jeremy Leaf, a former RICS chairman and north London estate agent, says: “The housing market was busy towards the end of last year, a trend which has continued into this one. However, as the CML suggests, this is not likely to be a market that is going to run away with itself. We expect things to settle down from mid-March when the market will find a new level, as it will be too late for investors and second-home buyers to complete before 1 April to avoid higher stamp duty.

“Surprisingly, what we have found is demand split roughly equally between investors keen to beat the 3% stamp duty surcharge from April and first-time buyers wanting to take advantage of additional property choice and competitively priced mortgages before interest rates start to rise.”

Richard Sexton,director of e.surv chartered surveyors, adds: “House purchase lending has been rejuvenated over the past year and, with the second half of 2015 looking stronger than the first in lending terms, the trend looks positive. Small-deposit lending has been transformed by a renewed enthusiasm to help first-time buyers cross the threshold of home ownership, as evidenced by the number of higher loan-to-value products available.

“Supply issues have become more of a factor in some areas as we head towards the turn of the year, as both growing demand and house prices finally get the attention they deserve from the government, but limited choice of affordable homes is certainly proving a challenge to some buyers. Alongside this obstacle, higher stamp duty changes are finally making their mark upon the top end of the market,” he adds.

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