Mortgage lending edges up

Julian Harris
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MORTGAGE lending rose at the end of last year compared to 12 months earlier, yet levels remain relatively deflated.

Gross mortgage lending in quarter four of 2011 reached £37.2bn – up on £33.6bn in the final quarter of 2010.

Yet total loans are significantly lower than before the credit crunch. Gross mortgage lending last year came to nearly £140bn, compared to £362.7bn in 2007.

“Many tenants are either finding it hard to make that leap to making their first purchase or simply don’t feel confident enough to move against a backdrop of increasing unemployment and bad news continually coming from the Eurozone,” explained Legal & General’s Ben Thompson.

However, Thompson suggested that the market would pick up as some point in the future. “There is a lot of pent up demand,” he said, “and sooner or later confidence will return and people will find a way to move.

“Remortgaging has held up nicely, and reflects the competitive deals offered by lenders in the autumn which created good incentive to switch to better rates.”

Gross lending was 12 per cent higher in December than a year prior. Yet loans for mortgages in the final three months of the year were lower than in the third quarter of 2011.

The Council of Mortgage Lenders (CML), which compiled the data, talked down yesterday’s figures, saying the rise was “from low [comparative] levels”.