Gross mortgage lending rose by 0.92% for the month of November, reaching just shy of £13 billion and hitting the highest level for the year, reports have revealed.
According to data from the Council of Mortgage Lenders (CML), the situation regarding mortgage lending and associated debt is better than expected as figure shown an increase in property transactions and net lending coupled with a decrease in the number of arrears.
Overall, 930,000 property transactions are expected to have been processed by the end of the year, equating to net lending of £9 billion.
This is a considerable increase in last year’s figures which saw 886,000 transactions and far surpasses previous estimates for this year which put expected transaction numbers at 825,000 with only £8 billion worth of lending.
Despite low industry expectations, the number of people in mortgage arrears was also better than expected.
Repossession figures are still on track to hit a fairly high figure of 35,000 but considering this is 10,000 fewer than anticipated, the positives are clear.
Elsewhere in the industry, average property values increased to £228,226 for the year. This represents an increase of 1% which whilst lower than the 2% current rate of inflation is still a promising figure.
As expected, geographic location affected the data with southern regions outperforming the north. Whilst London saw increases of almost 7%, some northern towns actually experienced price drops – with house prices in the Yorkshire town of Barnsley decreasing by 3.6%.
With numerous factors affecting the housing industry, reasons for the exact cause of the figures are less than clear.
However, the CML has claimed the launch of the Funding for Lending Scheme (FLS) which began in August could be partly responsible.
Chief Economist for the organisation, Bob Pannell, explained that “the FLS now has the potential to underpin a modest pick-up in mortgage lending activity”.
This coincides with the CML’s forecast for the coming year which has put property transaction numbers at an estimated 950,000 and £12 billion of net lending.
They also expect the first-time buyer market to get a significant boost hitting the highest number for five years at 200,000.