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Data for February shows another spike in year-on-year gross lending

Gross mortgage lending in February was almost identical to the previous month but increased significantly year-on-year, according to the Council of Mortgage Lenders.

Lending in February was an estimated £10.7bn, relatively unchanged on January’s £10.65bn but 14% higher than February 2011.

Bob Pannell, chief economist at the CML, says that while a seasonal decline is expected over the winter months, February was the seventh consecutive month to see a year-on-year rise in lending.

He says: “This indicates that lending for house purchase remains brisk in advance of the end of the Stamp Duty concession.”

He adds that the NewBuy Guarantee scheme has the potential to offset the dip in first-time buyer activity that is expected to come to an end at the weekend.

David Brown, commercial director of LSL Property Services, says buyers looking to beat the end of the Stamp Duty holiday will have played a role in the swollen lending figures in February, but there is a more encouraging long-term trend emerging.

He says: “Lending figures have grown annually for seven months, suggesting lenders have been acclimatising to the constrained funding environment. If lending holds up after the Stamp Duty holiday, it will demonstrate the relative stability of the market.”

But David Whittaker, managing director of Mortgages For Business, says NewBuy will not do enough to generate the momentum required to maintain market recovery.

He says: “Once again we’ll see scores of would-be buyers relying on rental accommodation, the supply of which is already stretched. More needs to be done to find a balance in the recovery, rather than focussing on one or two areas.”

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