Annual gross mortgage lending at highest since 2008

Gross mortgage lending is estimated to have risen by 8% in 2015, while house purchase lending saw an 18% year on year increase in November, according to the latest market commentary from the Council of Mortgage Lenders (CML).

Estimates from the CML put gross mortgage lending at £19.9 billion in December.

While the figures are 3% lower than November (£20.5 billion), they are up 23% on December 2014 (£16.2 billion), bringing the estimated total for the year to £220.3 billion.

This is an 8% increase on the £203.3 billion seen in 2014 and the highest annual gross lending figure seen since 2008.

The CML reports that probable lending figures for the fourth quarter of 2015 are therefore approximately £62.3 billion.

This is a 1% increase on the third quarter and a 23% increase on the fourth quarter of 2014.

Mohammad Jamei, economist at the CML, said:

“Lending ended the year stronger than it started, with our estimate of nearly £20 billion lent in December.

This brings total lending to just over £220 billion for 2015 as a whole, and slightly higher than we had anticipated.

The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals have all helped to underpin demand.

“Having said this, the upside potential looks limited over the near-term, as 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.”

The CML has also published its lending figures for November 2015 and reports that homeowner house purchase lending hit £10.7bn in November, down 9% on October but up 18% on November 2014.

Gross buy to let dropped month on month by 6% in volume and 8% in value, but the substantial growth year on year continued.

Buy to let remortgage continued to be the driver of activity, remaining consistent with October and considerably up on the year before.

While 9% down on October, first-time buyer homeowner lending was up by 14% on November last year, reaching £4.2bn.

This totaled 27,900 loans, down 8% month on month but up 10% year on year.

Home movers borrowed £6.5bn in November, down 10% on October but up 20% year on year.

In total this equated to home movers taking out 32,300 loans, down 10% month on month but up 9% compared to November 2014.

Lastly, homeowner remortgage activity was down 9% by volume and 14% by value, compared to October.

However, compared to November 2014, remortgage lending was up 24% by volume and up 36% by value.

Commenting on the lending figures for November 2015, Paul Smee, director general of the CML, said:

“As expected, mortgage lending activity eased back as the normal dip in the winter months began.

There was still growth across all lending types in November compared to the year earlier suggesting continued improvement.

Our forecasts anticipate that gross lending will continue a slow but steady upward trajectory over the next two years.”

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