Banks approved £12.4bn of mortgage loans in December 2015, up 24 per cent year-on-year, according to the British Bankers’ Association.
While lending was up annually, lending dipped slightly from £12.5bn in November, says the trade body.
Gross lending among the major high street banks totalled £138bn across the whole of 2015, an increase of 6 per cent on the previous year.
Banks approved 75,745 loans in the final month of the year, and the average approval value was £177,000.
BBA chief economist Richard Woolhouse says: “Last year was a strong year for household borrowing. There was a 6 per cent rise in mortgage borrowing compared to 2014 and consumer credit expanded at more than 5 per cent annually within an overall unsecured market which is growing at nearly 10 per cent annually.
“Over the last few years businesses have been reducing their bank borrowing partly by deleveraging or by refinancing debt through capital markets; 2015 saw business lending other than construction and real estate move into positive annual growth.”
Aldermore group managing director Charles Haresnape says: “Today’s figures highlight the continuing strong year-on-year growth across the housing market. In spite of December traditionally being a slower month, the numbers reflect continued activity among house buyers and owners looking to re-mortgage.
“With record low mortgage rates across the market, it is unsurprising to see re-mortgaging up by almost one-third on last year’s levels. December also saw the launch of the Help to Buy: ISA, so it will be interesting to see if savings deposits are up for this month too.”
Mortgage Advice Bureau head of lending Brian Murphy says: “Those taking out a loan for house purchase are having to take on increasing levels of debt, with the average value of a purchase loan reaching a record high of £177,000. Systems are in place to ensure that borrowers don’t overstretch themselves, but this paints a worrying picture of affordability for first-time buyers.
“However, Mark Carney’s recent announcements have alluded there will be no interest rate rise in the near future, and this means the current low mortgage rates are likely to stick around for longer. Rock bottom rates help to make the property market more accessible, and Government schemes for affordable housing will also help lower income buyers.”