Gross lending increased by 12 per cent during 2016 to £246bn, the highest figure since 2008 and a significant improvement on 2015’s total of £220bn.
The Council of Mortgage Lenders estimates that gross mortgage lending reached £20.4 billion in December.
This is 4 per cent lower than November (£21.2 billion), and 4 per cent higher than December 2015 (£19.7 billion).
Gross mortgage lending for the fourth quarter of 2016 was therefore an estimated £62 billion. This is a 3 per cent decrease on the third quarter and closely matches the 61.8 billion lent in the fourth quarter of 2015.
CML senior economist Mohammad Jamei says:“The UK housing market, much like the wider UK economy, ended 2016 on a generally positive note.
“Approvals for house purchase have recovered strongly of late, and this should feed through to lending figures in the early months of 2017.
“The current availability of mortgage credit is benign, and the real issue continues to be a dearth of properties on the market, which adds to the challenges facing would-be buyers.
“Uncertainty associated with political factors and prospective changes to the tax treatment of landlords will weigh on prospects for the year ahead.”
SPF Private Clients chief executive Mark Harris says: “2016 turned out to be an encouraging year for the mortgage market, despite significant headwinds created by the increase in stamp duty for landlords and second homeowners in April and the uncertainty surrounding the referendum.
“Record low mortgage rates were responsible for this resilience, with many borrowers remortgaging to take advantage of the lowest rates ever while first-time buyers were able to take advantage of an increase in the number of high loan-to-value deals.
“Moving into this year, Swap rates have settled down since the beginning of January and several lenders have announced competitive deals on the back of these.
“HSBC, Barclays and Aldermore have all launched cheaper rates this week and an appetite to do business among lenders shows no signs of abating.
“This is particularly good news for those borrowers who require a straightforward ‘vanilla’ mortgage but we would like to see more tweaking of criteria and innovation to make it easier for other groups such as older borrowers and the self-employed to access mortgage finance rather than just cheaper rates.”
North London estate agent and former RICS residential chairman, Jeremy Leaf adds: “These figures are positive news and reflect other surveys which have shown that the property market showed a lot more resilient than some gave it credit for last year, particularly after the referendum.
“However, what sets the tone for the new year is approvals in the pipe line and market sentiment, both of which have been fairly neutral so far.
“What we are seeing on the ground are fewer but more serious buyers keen to take advantage of the opportunity afforded by a market with more balance between supply and demand.”