Mortgage lending jumps 18% year-on-year in November, latest numbers show

14th January 2016


The number of mortgage advances for house purchases hit £10.7bn in November marking a year-on-year rise of 18% but a 9% drop on October, new numbers from the Council of Mortgage Lenders (CML) have revealed.

Paul Smee, director general of the trade body said: “As expected, mortgage lending activity eased back as the normal dip in the winter months began.

“There was still growth across all lending types in November compared to the year earlier suggesting continued improvement.

“Our forecasts anticipate that gross lending will continue a slow but steady upward trajectory over the next two years.”

The CML data showed that mortgage activity in November was led by first time buyers, with the number of advances for house purchases up 10.3% year-on-year to 27,900, although down 7.9% month-on-month.

Mortgage advances to homeowners were up 8.8% year-on-year to 32,300 but they too were lower, down 10% from October.

Meanwhile, buy-to-let mortgage advances for house purchases were up 17.6% to 10,000, continuing the robust growth.

Howard Archer, chief UK and European economist at IHS Global Insight said the figures suggest that housing market activity is still pretty buoyant, although he noted there have been some recent signs that the growth in activity may be levelling off.

He highlighted that while the latest Royal Institution of Chartered Surveyors (RICS) survey indicated that buyer enquiries rose for an eighth successive month in November, the rate of increase has slowed recently and in November was the slowest rate since April.

In addition, the Bank of England reported that mortgage approvals for house purchases moved back up to 70,410 in November from 69,867 in October and 69,168 in September but remained just below the 19-month high of 70,864 seen in August.

Archer said: “Taking an overview of the various surveys, we expect house prices to rise by around 6% over 2016 amid healthy buyer interest, supported by largely decent fundamentals, and a shortage of properties.

“Buyer interest seems likely to be supported by largely helpful fundamentals, notably including overall increased earnings growth, high and rising employment, relatively elevated consumer confidence and ongoing very low mortgage interest rates.”

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