UK mortgage lending at 11-month high

Mortgage lending in the UK reached an 11-month high in October, providing evidence that the housing market is finally picking up after a lull in recent months, lenders said today.

Gross mortgage lending rose to £12.9bn (€16bn) and was 4% higher than the same month last year, indicating that a UK government scheme recently launched to boost lending is having an effect, the Council of Mortgage Lenders (CML) said.

The latest lending estimate marks a reversal of a sharp dip recorded in September, when loans worth £11.4bn (€14.2bn) were advanced.

The British Treasury and the Bank of England launched the £80bn (€99.6bn) funding for lending scheme at the start of August to kick-start lending to households and businesses and it has already resulted in an increase in the number of mortgages on the market, although many of the best deals so far have been aimed at people with larger deposits.

CML chief economist Bob Pannell 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.”