Gross mortgage lending 10% stronger than year ago

Although a seasonal decline is expected, January was the sixth month in a row of higher year-on-year lending.

In the latest CML market commentary, chief economist Bob Pannell said: "Housing and mortgage market sentiment has improved a little over recent weeks.

"The increase in lending compared to January last year helps support our view that housing and mortgage market activity may be boosted by first-time buyers seeking to complete deals before the stamp duty concession ends in March.

"Should inflationary pressures continue to fall back, the squeeze on household finances should ease progressively and help support stronger economic recovery going into the second half of the year. This can only be good news for the housing market further down the track."

Nicholas Leeming, business development director at Zoopla.co.uk, said:

“The property sector relies on a healthy lending market and while lenders are still nursing the hangover of the crisis this is another step in the right direction. The Bank of England has hinted that rates will stay low for the foreseeable future so borrowing will remain cheap as a result. However, the end of the first-time buyer stamp duty holiday looms large and this will have a significant impact on the market. Lending figures will remain strong in the lead up to the deadline as first-time buyers rush to beat the deadline but it’s likely we’ll see a lull in the middle of the year as a result of activity exhaustion from this section of the market. It’s important then that lenders keep introducing attractive and affordable mortgage deals to boost activity. If they don’t, we’re in danger of taking one step forward and two steps back.”   

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