Gross mortgage lending hits £13.7bn
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Gross mortgage lending rose 14% last month to hit £13.7bn, according to figures from the Council of Mortgage Lenders.
Gross lending defied expectations of a seasonal dip in lending, going from £12.1bn in November to £13.7bn in December.
The figure is up 3% on December 2008, and represents the first time the annual monthly comparison has been in positive territory since October 2007.
But the CML notes this is still the lowest figure for December since 2001, when it was £13.4bn.
Total lending between October and November reached £39.1bn, up slightly from £39bn in the previous quarter but down by 14% on the last three months of 2008.
The CML says there is typically a 6% fall between the third and fourth quarters.
Total lending for the whole of 2009 hit £143.7bn, slightly above the trade body’s annual forecast of £141bn.
Yet this is down 43% from £253bn in 2008 and the lowest annual total since 2000 at £119.8bn.
Paul Samter, economist at the CML, says: “The December figure is surprisingly strong as there is typically a small decline in the month.
“Evidence suggests that the rise was driven by a surge in house purchase completions – as remortgaging still remains exceptionally weak.
“The most likely explanation is that buyers of cheaper property wanted to complete their transactions before the end of the year to beat the end of the Stamp Duty holiday.”
Samter warns that this “bunching” of sales ahead of the Stamp Duty holiday coming to an end last year means that mortgage lending may be hit harder in the early part of 2010.
He adds: “But there is every reason to expect a gradual improvement in the latter part of the year.
“With a gradual pick up in economic growth and wider access to credit, 2010 will almost certainly be a better year in the mortgage market than 2009.”
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