November mortgage lending highest ever

Gross lending hit an all time record of £33.1 billion in November according to the latest data from the Council of Mortgage Lenders (CML).

Lending was 9% higher than the October figure of £30.5 billion, and 19% higher than the £27.7 billion of lending in November last year. It was 0.2% higher than the previous record set in August of £33 billion.

The strength of lending has been fuelled by the number of households growing more quickly than the supply of available housing. This has pushed up annual house price growth to nearly 10% in the final quarter of this year, compared to between 3% and 5% at the beginning of the year. Strong growth in the London housing market coupled with robust buy-to-let demand have also contributed to November’s record lending figure.

Commenting on today's data, CML Director General Michael Coogan said: "The housing market is undoubtedly in robust shape as we move towards the New Year. Not only is today's lending figure the highest ever, our recently published forecasts suggests lending will beat our previous predictions for the coming two years.

"Looking ahead, mortgage lending looks set to remain seasonally strong over the winter months, reflecting a continuing high level of transactions and house price growth. As for 2007 as a whole, we expect to see gross lending total around £360 billion - another record breaking year."

British Bankers’ Association (BBA)

Latest figures from the Major British Banking Groups, for November 2006, show that:

Total sterling lending to the UK private sector showed a net underlying increase of £17.2bn (+1.4%) to £1,271bn. This was well up on both the previous month’s underlying rise of £12.1bn and the average of £12.7bn over the previous six months.

Net mortgage lending rose by an underlying £6.5bn. This was the highest increase on record, exceeding the increase of £5.6bn in October and a monthly average of +£5.7bn over the previous six months. Unsecured personal lending was unchanged in November, compared with a net increase of £0.1bn on average, over the previous six months. Loans & overdrafts fell by £0.1bn, whilst underlying credit card borrowing rose by £0.1bn.

Lending to real estate companies rose by £0.7bn; lending to wholesale and retail trade rose by £0.3bn; and hotels & restaurants, construction and agriculture & fishing each rose by £0.1bn. Loans to financial companies rose by £7.2bn.

Deposits from the private sector rose by £8.7bn (+0.9%) to £929bn. Personal deposits increased by £2.9bn, in line with average growth of £3.0bn over the previous six months.

David Dooks, BBA director of statistics, said: “Net mortgage lending strengthened further in November with the highest monthly rise on record. This shows just how strong secured lending is and how, as yet, demand has not been moderated by the climate of higher interest rates. As one might expect, fixed rate mortgages are proving popular, given their certainty over repayment costs.

Although credit card borrowing stopped contracting in November, overall unsecured lending remained very subdued.”