Mortgage lending forecast to rise by nine per cent

Mortgage lending will hit £156bn this year as lenders face fewer funding pressures, the Council of Mortgage Lenders said today.

This marks a jump of nine per cent from last year’s £143bn total, and £141bn the year before that, according to figures released today.

Bob Pannell, chief economist at the CML, said today that it was more positive about the UK housing market and wider economy than a year ago.

"A key reason is that lenders currently face few funding pressures, in part reflecting the Funding for Lending scheme," he said.

"House purchase activity was robust in the fourth quarter, on the back of better mortgage availability and pricing, and we expect this to continue over the coming months."

Ashley Brown, director of independent mortgage broker Moneysprite, countered that although the Funding for Lending scheme had started to show positive signs, “it's not had the immediate impact everyone was expecting, so the jury's still out on whether it will be a game changer”.

He added: “This year is a critical one for the mortgage market after suffering a few years in the doldrums. The likelihood is that we will see improvement on last year, but nothing miraculous.

"The mortgage and property markets are in for a long, hard slog."