Mortgage loans hit a five-year January high

 
Ben Southwood
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THE NUMBER of mortgage loans rose to its highest January rate since 2008 this year, in another sign that the Funding for Lending Scheme (FLS) is boosting the housing market.

There were 38,300 home purchase loans in the first month of the year, the Council of Mortgage Lenders (CML) said yesterday, 10.7 per cent up on the same month of 2012, despite a 16.6 per cent seasonal dive between December and January.

Their total value had also soared compared with a year earlier, up 9.6 per cent to £5.7bn, again despite a seasonal crash of 17.4 per cent over the turn of the year.

“Seasonal factors clearly had an impact on lending figures in January, but it still remains the best start to a year since 2008,” said CML director general Paul Smee.

Particularly healthy was the lower end of the market, with first-time buyers securing some 24.2 per cent more loans, together worth a full quarter more than in the same month in 2012.

And the easier credit was also finding its way to the manufacturing industry, according to separate data out this morning.

All the measures of the availability of credit from EEF were positive, the manufacturing trade body said, the first time such a result has come in since the EEF’s first survey in 2007.

EEF chief economist Lee Hopley said: “The UK economy desperately needs finance flowing to every viable investment opportunity possible to support growth.”

“This quarter’s survey shows an encouraging further reduction in the balance for firms reporting an increase in the overall cost of credit, and genuine improvement in the availability of credit,” she added.

Perhaps because the property market is heating up, the pace of annual rental growth accelerated in February, according to research out this morning.

The average rent in England & Wales was £731 per month in February, LSL property services said, up 3.3 per cent since the same month a year before, an acceleration in the pace of expansion compared to the 2.8 per cent growth registered in January. The capital led the pack with an average rent of £1,092, compared to just £524 in the cheapest region – the north east.