CML: February lending highest since 2008

Gross mortgage lending reached £15.2bn in February, 43 per cent higher than the £10.2bn lent in February 2013, the Council of Mortgage Lenders has estimated.

The figure is six per cent lower than the amount lent in January of this year, but represents the highest total for a February since 2008.

Bob Pannell, chief economist at the CML, said: “Housing market indicators continued to be strong over recent months, once seasonal factors have been taken into account.

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“First-time buyers have benefited most from the government’s Help to Buy initiatives, with the more recent mortgage guarantee scheme now starting to push typical loan-to-value levels higher.

“The housing market got a further boost from this week’s Budget. This, together with benign developments in the economy more widely, should bolster short-term sentiment and activity.”

Stephen Smith, director of Mortgage Club and housing at Legal & General, said that with Help to Buy equity loan scheme being extended until 2020, the upward trend in mortgage lending could continue despite the introduction of the Mortgage Market Review.

He said: “However, there are still some major obstacles for those looking to get on the housing ladder or move from their current home. House prices in certain parts of the country continue to rise far faster than the rate of wage inflation making them simply unaffordable for many.

“The government’s initiatives to build more homes, announced in yesterday’s budget, will go some way to help keep the market fluid and ensure demand doesn’t continue to outstrip supply. Despite this, we still need to see much more stimulus to house building.”

Ian McGrail, managing director of FirstMortgage, said the figures are in line with an increase in business levels for the company.

He said: “This growth looks set to continue steadily into the year, although we would expect activity to slow down temporarily at the end of April when the Mortgage Market Review comes into effect, as lenders get to grips with the reality of the reforms imposed”.