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28 February 2017

Banks report highest mortgage lending since 2008

Home loans have reached their strongest levels in nine years, showing signs the property market is resilient to the UK's uncertain economic conditions, banks and building societies are reporting.

There was an estimated £18.9 billion-worth of mortgage lending in January - the highest level since January 2008, according to the Council of Mortgage Lenders (CML).

CML economist Mohammad Jamei said: "Overall mortgage lending continues to hold up pretty well, but we seem to have a twin-track market.

"Weakness in buy-to-let and home movers has been offset by an increase in first-time buyers and re-mortgage lending.

"A continuing acute shortage of homes being offered for sale is one aspect of a broken housing market, that looks unlikely to resolve in the near term."

Buy-to-let lending became more subdued following a stamp duty hike for investors imposed in April 2016. But there have been signs of strong re-mortgage lending in recent months as borrowers have taken advantage of the low rates on offer.

The Government has been keen to stimulate growth in the housing market, and recently unveiled a package of proposals aimed at boosting the number of properties available to buy. These include measures to speed up the house-building process and encouraging innovation from smaller builders.

Charlotte Ernest

Charlotte Ernest

Tel: 01753 279094

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