GROSS mortgage lending in December showed annual growth for the first time since October 2007, the Council for Mortgage Lenders (CML) said yesterday.
Total lending reached £13.7bn last month, a three per cent rise on December 2008 and a 14 per cent gain on November. Paul Samter, economist at the CML, said: “Evidence suggests that the rise was driven by a surge in house purchase completions – as remortgaging still remains exceptionally weak. The most likely explanation is that buyers of cheaper property wanted to complete their transactions before the end of the year to beat the end of the stamp duty holiday.”
Despite the return to positive growth, the CML warned that this was the worst December since 2001. In 2009, lending totalled £143.7bn, down 43 per cent on 2008.
Meanwhile, the Bank of England’s Trends in Lending survey, released yesterday, showed that the flow of lending to business rose in November for the first time since January 2009. This could indicate that credit conditions are starting to improve.
However, lending was still down 7.6 per cent on November 2008 and policymakers remain concerned about small firms’s access to credit.