Mortgage lending 12 per cent higher in December

| January 24, 2012 | 0 Comments
Mortgage lending 12 per cent higher in December

December marked the fifth consecutive month of year-on-year growth in mortgage lending, with a 12 per increase, according to the Council for Mortgage Lenders (CML).

Gross mortgage lending in December was an estimated £11.7 billion, while for the whole year it totalled £140 billion, £2 billion higher than the CML’s expectations.

December’s figures represent a 12% drop from November 2011, but this was partly due to the smaller number of working days in December.

November’s figures were also boosted by a substantial increase in the number of house-buyers taking up fixed-rate deals

In a strong end to the year, mortgage lending for the final quarter of 2011 totalled £37.3 billion, a year-on-year increase of 11 per cent.

However in the face of continuing economic uncertainty, a weak 2012 first half is expected for the housing market, with demand from buyers slowing as lenders increase mortgage rates.

Bob Pannell, the CML’s chief economist, said: “The closing months of 2011 saw stronger mortgage lending activity and housing transactions, despite the fact that short-term economic prospects are challenging.

“There is a glimmer of light ahead for households in that real incomes could stabilise and perhaps even start rising by the end of the year.

“But, continuing eurozone problems mean that mortgage funding prospects are uncertain, so overall UK mortgage market conditions for the year ahead remain difficult to call.”

The CML is also reminding property owners that they should take out rent protection insurance, as the ongoing economic uncertainty is expected to lead to an increase in repossessions.

Rising unemployment and other pressures on incomes are likely to see more people falling in arrears with their rent and mortgage payments in 2012, the CML warned.

Rent protection insurance protects a landlord for a specified length of time if a tenant is unable to pay the rent.

Tags: Council for Mortgage Lenders, , , , , rent protection insurance

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