Gross mortgage lending up 11%

Mortgage lending has grown by 11 per cent according to new analysis which also revealed remortgaging will be the dominant market force this year.

That is according to the Council of Mortgage Lenders (CML) which today unveiled its gross lending figures for January to uncover surprisingly good lending performance given the unsettled market conditions.

The CML said lending increased to an estimated £26.5 billion in January, which was up 11 per cent from the £23.9 billion recorded in December.

These buoyant figures will also come as good news because typically January is one of the slower months for lending.

However, the CML warned gross lending volumes were expected to decrease in the coming months because of the fall in mortgage approvals at the end of last year. Remortgaging, rather than house purchase, looked set to dominate the mortgage market, it said.

And the figures come as it emerged six lenders offering 125 per cent loan-to-value mortgages were pulling these high-risk home loans from the market.

Michael Coogan, CML director general, said while gross lending held up well in January there was considerable uncertainty in the housing market at the moment and he expected lending volumes to be lower in the coming months.

He added: "It is likely demand will be stronger for remortgaging than for house purchase in the short term.

"Home buyers might be more inclined to transact if their moving costs were reduced and the government has the opportunity to address this by raising stamp duty thresholds and cutting the rate of stamp duty in next month's budget."