Mortgage lending hit a five-year high of £49.3 billion between July and September as buyers stampeded to get on the housing ladder, the Council of Mortgage Lenders said today.
Gross lending — which includes house purchases and remortgages but not repayments — was 32% ahead of the same period last year and the highest lending amount since the third quarter of 2008. September’s £16.2 billion figure was 41% higher than 12 months earlier.
The Government’s Help to Buy initiative of guarantees for 95% home loans looks set to fuel demand in coming months after the CML’s latest commentary suggested housing transactions averaging 90,000 for the past three months.
Chief economist Bob Pannell said: “Indicators suggest we are witnessing the strongest house purchase performance in five years. House prices too have revived but modestly, aside from a resurgent London market.”
He added: “It may be several months into 2014 before we get a true gauge of the scale and reach of Help to Buy. For now, the scheme has launched against an already recovering UK housing market with several quarters of improving credit availability, growing competition, and strengthening demand.”
The Bank of England’s latest Trends in Lending report, however, showed the stock of lending to businesses shrank by £2.3 billion in the three months to August. The contraction in lending was reflected across all sizes of firms, the report said.
