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Mortgage lending soars 29% to five-year high

Julia Rampen
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Julia Rampen

Banks and building societies stepped up lending by 29% year-on-year to advance £16.6bn in July, Council of Mortgage Lender figures have revealed.

Gross mortgage lending was also 12% higher than in June and represented the highest monthly estimate since October 2008.

CML market and data analyst Caroline Purdey said: “An improvement in sentiment and activity continues to show in the UK housing and mortgage markets, with a more positive picture also starting to emerge in the economy.

“Our forward estimate of gross mortgage lending in July reinforces a growing evidence base of a strengthening in the housing and mortgage markets.”

Your Mortgage Decisions director Martin Wade said his firm had seen new enquiries throughout 2013: “I guess it is down to the fact that people believe house prices are feeling more solid and the prospect of house prices going up over the next few years has encouraged people to borrow.

“Lenders certainly seem more willing to lend and products have been getting more competitive over the last few months as well, culminating in the most tremendous deals. Why wouldn’t people want to borrow when they could access long-term funding at 2.5%?”

Mortgage Advice Bureau head of lending Brian Murphy said borrowers had benefited from a boom in product choice: “Additional funding through government initiatives has caused lenders to compete for business in order to catch ambitious lending targets.

“Since the start of the Funding for Lending Scheme began rates have fallen by one percentage point across two, three and five year fixes. The market is certainly ripe for the picking, with the best choice of products and deals for years.”