Lending at seven-year high, says Council of Mortgage Lenders
The trade association for mortgage lenders in the UK, the Council of Mortgage Lenders (CML), has reported that annual mortgage lending is at a seven-year high.
According to the latest CML estimates, gross mortgage lending in the UK reached £19.9 billion in December.
Although this figure is actually 3% lower than the previous month, when it hit £20.5 billion in November, it is 23% higher year-on-year.
Overall, the estimated total for 2015 is £220.3 billion, which represents an 8% increase on £203.3 billion in 2014 and is the highest annual gross lending figure since 2008.
Low inflation environment
CML economist Mohammad Jamei commented: "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."
Jamei went on to say that weak supply of both existing and new properties on the market together with affordability pressures are factors that will continue to affect activity in the sector.
The impact of tax changes on the buy-to-let sector might also trigger a glut of new properties coming to the market later in the year. The overall prospects for 2016 are also complicated by recent remarks from the Governor of the Bank of England regarding the timing of possible interest rate increases.