Mortgage Lending Up 4 Per Cent
Mortgage lending rebounded to an 11-month high in October, suggesting that residential property market conditions are improving following a significant fall reported for September, according to the Council of Mortgage Lenders (CML).
The latest CML figures reveal that lending rose to £12.9 billion last month, up four per cent compared to October 2011, supported in part by the government's Funding for Lending scheme, designed to boost lending to households and businesses.
Richard Sexton, Director of e.surv chartered surveyors, said: “The improvement is largely down to Funding for Lending scheme, which has encouraged banks’ to increase lending. FLS has created a cacophony of debate, but it looks like we’re finally seeing it boost lending by supporting banks’ balance sheets with cheaper funds.”
The data marks a turnaround of the sharp decline in September 2012 when loans worth £11.4bn were advanced, down from £12.9 billion in August.
The Treasury and the Bank of England launched the £80bn Funding for Lending scheme in August, and it has already resulted in an increase in the number of mortgages on the market.
Bob Pannell, chief economist at the CML, said: “House purchase and remortgage activity both appear to have picked up recently, and this should be supported by an improvement in the availability and pricing of mortgages.
“The Funding for Lending Scheme is likely to have made an early positive impact, helping to counter some of the negative pressures associated with a protracted and weak economic recovery.”
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