Gross mortgage lending totalled £21.8bn in February, 5% lower than January's £23bn but 22% higher than the £17.9bn lent in February 2005, according to the Council of Mortgage Lenders (CML).
Despite February typically being the weakest month of the year for mortgage lending, the CML says house-buying activity has remained strong in recent months, thus demonstrating consumer confidence in the housing market.
Michael Coogan, CML director general, states: “Today’s gross mortgage lending figure is the fourth record in consecutive months. Confidence in the housing market is strong and demand has returned to the levels we witnessed two years ago.”
He adds that areas which saw sluggish activity over the past couple of years such as London and the South East are now seeing a clear strengthening in house prices.
Further, house-buying activity and mortgage lending looks set to remain well-supported over the coming year, says Coogan, because the economy is in good shape and interest rates look stable.
But, he adds: “The latest mortgage approval figure suggest the upward trend in activity might be drawing to an end. If that does happen, it would be in line with our forecasts of some moderation in activity through the year.”
Meanwhile, the latest figures from the Building Societies Association (BSA) reveal building society gross advances were £3.2bn in February compared to £2.8bn in February 2005.
Net advances were £629m compared with £602m the previous year, a 4.5% increase, while approvals were £3.6bn up from £3.4bn in February 2005.
Brian Morris, head of savings at the BSA, says: “On a seasonally adjusted basis, February’s mortgage approvals were slightly down on January’s high. While the market remains strong, indeed out-stripping some commentators’ expectations, a slowing number of loans agreed but not yet made could signal a slight moderation after a relatively buoyant winter.”
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