'Glimmer of hope' as mortgage lending rises, says CML
The Council of Mortgage Lenders (CML) has proclaimed that there is light at the end of the tunnel for property buyers as the mortgage market shows early signs of a recovery.
According to the organisation, there is a "glimmer of light" on the horizon as activity in the market rises.
Gross mortgage lending at the end of last year stood at an estimated £11.7 billion, according to new figures from the CML.
While this represented a 12 per cent drop month-on-month, the figure is still 12 per cent higher than it was in December 2010.
The last month of 2011 was the fifth consecutive month that year-on-year lending increased.
However, Dominic Hennessy, managing director of the mortgage brokers Just Us mortgages, feels the staid property market is not just down to the state of the economy. He said: "Despite a brief rally in November, the mortgage market ended 2011 with a whimper rather than a bang.
"For many in the industry, it was frankly a year best forgotten. Total lending was only a whisker better than it was in 2010. But the lenders cannot blame this solely on the gloomy economic picture. The mess is partly of their own making.
"Despite rock bottom interest rates making mortgages cheaper than they have been for years, lenders are still very choosy about who they will lend to. Anyone self-employed or with anything less than a flawless credit score isn't even in the game."
In the last quarter, meanwhile, total lending reached £37.3 billion - 11 per cent higher than the £33.6 billion lent to households in the final three months of 2010.
For the entire year, the increase in lending was more modest - totalling three per cent and climbing from £136 billion in 2010 to £140 billion.
"The closing months of 2011 saw stronger mortgage lending activity and housing transactions, despite the fact that short-term economic prospects are challenging," CML chief economist Bob Pannell said.
He added: "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."
HSBC is one of the many lenders who have pledged to boost mortgage lending in 2012, with the institution claiming it will ring-fence £3 billion for first-time buyers.
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