New figures show that gross mortgage lending fell by 18% on the year to December 2010 – a month
which showed the lowest December lending since 2000.
The information comes from the Council of Mortgage Lenders (CML) monthly market commentary.
The CML added that the unfavourable comparison with 2009’s figure may be artificially “distorted”
by buyers who brought forward house purchase activity in the closing months of 2009, to take
advantage of a Stamp Duty concession that expired at the end of the year.
Lending in December 2010, which totalled £11 billion, was down 6% from November’s figure. For
the whole of 2010, gross mortgage lending totalled £136.3 billion, which was slightly more than the
CML’s annual forecast of £135 billion.
CML economist Peter Charles said: “Money market rates have recently moved higher in anticipation
of a rise in base rate and some lenders have recently reflected these increases in their product
pricing. Against this backdrop, consumer demand may be weaker than we would otherwise have
expected.”
He added: “Higher interest rates will also hit the budgets of existing borrowers, although the
expected modest rises in base rate will result in a relatively small proportionate rise in monthly
payments for most mortgage holders. Consequently we believe there will be little change in the
level of arrears this year, and we do not anticipate revising our current arrears forecast.”
