Is the rise in mortgage lending a positive sign?

Reports that mortgage lending increased during September are a “very positive sign” for the UK housing market, an industry expert has claimed.

Stuart Law, chief executive of property investment firm Assetz, made the remarks after the Council of Mortgage Lenders (CML) reported a 2% rise in mortgage lending during September.

Law said he is optimistic about the future of the property market.

“If lending carries on rising at the rate we’ve been seeing for the last six months then prices will be back to their peak in 18 months time,” he said.

According to the CML total new mortgage lending during September was £12.5 billion, up 2% compared to August, but down 27% compared to September 2008.

Andrew Montlake, director of mortgage broker Coreco, was more restrained than Law in welcoming the lending increase.

“While these latest figures hardly set the world alight, they do highlight the continued stabilisation in the housing market and some undoubted positive signs,” he said.

The CML said lending is unlikely to rise any further given the “difficult economic backdrop”.

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