Gross mortgage lending in 2013 was £34bn higher than total lending in 2012, according to the Council of Mortgage Lenders, which has published new data showing the extent of the recovery in 2012.
New figures from the CML estimate that gross lending reached £177bn in 2013, up from £143 the year before. However, while the recovery was strong with growth of 24 per cent, the market remains below a “normal” level of £240bn annually, according to Legal and General.
The figures show that December lending was up almost 50 per cent on the same month in the previous year, reaching an estimated total of £17bn. Although this figure is flat with November lending estimates, it is 49 per cent up on the same month in 2012 and the highest total December lending since 2007.
Gross lending for the fourth quarter of 2013 was estimated at £52bn. This represents a 5 per cent increase on the third quarter and a 38 per cent increase on the fourth quarter of 2012 (£37bn), marking the highest lending amount in a single quarter since Q3 2008.
Bob Pannell, chief economist at the CML, said: “Short-term growth prospects for the housing market and the wider economy look very positive. Mortgage lending was stronger than we expected in the closing months of 2013, but lenders expect little if any boost to borrower demand this quarter.
“While some of these gains reflect government schemes, the rationale for the positive narrative is a much broader one, reflecting such factors as the improving economy and jobs market, consumer confidence and competitive mortgage deals.”
Jeremy Duncombe, director at Legal & General, said: “This shows how the market has changed over the last 12 months, although lending levels are still well below where they were in 2007, and below a “normal” market of around £240bn.
“To ensure that the market continues to grow over the next year it is important that a good supply of appropriate homes is available, alongside a range of mortgage products suitable for the needs of different borrowers.”
Andy Knee, chief executive of outsourced property service provider Legal Marketing Services, said: “The positivity engulfing the mortgage market is also reflective of budding optimism about the wider economy. Inflation has been wretched back under control, the jobs market is showing signs of growth and unemployment is falling.
“Even previously stagnant wages are looking like they are set to finally pick up later this year. This, together with the second phase of Help to Buy, should help to further reduce the burden of building a deposit.”
