Mortgage lending strengthens

Tuesday, 20 December 2005 12:00

Mortgage lending was stronger in November, new figures reveal, further strengthening the property market.

Data out today from the Council of Mortgage Lenders, the British Bankers' Association, and the Building Societies Association all show strong mortgage figures in November.

"After the doubts about the health of the housing market expressed by some commentators earlier this year, the latest figures show a robust market," said Adrian Coles, director general of the Building Societies Association.

"Loans advanced by building societies are up almost 20 per cent year-on-year and approvals, loans promised but not yet made, are up by over a third. The housing market has clearly recovered from the effects of the sharp increase in interest rates which peaked at 4.75 per cent in August 2004."

The Council of Mortgage Lenders' figures show gross mortgage lending was up by five per cent on the previous month in November, to £28.5 billion, the second highest monthly lending figure on record.

Michael Coogan, Council of Mortgage Lenders director general, said: "The housing and mortgage markets have clearly strengthened significantly from the lows of a year ago. There have been upward trends in gross mortgage lending and approvals, and more stable house prices in recent months."

But these large increases in mortgage lending, while reinforcing the property market, do not mean that house prices are set to grow rapidly again.

Howard Archer, chief UK economist at Global Insight, noted: "Robust overall mortgage lending and approvals data indicate that housing market activity continued its recent firmer performance in November. This is likely to put a floor under house prices, but we remain highly doubtful that house prices will move markedly higher any time soon."

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