Record gross lending in 2007

2007 as a whole proved to be the strongest ever year for gross mortgage lending, according to the Council of Mortgage Lenders. It reached an estimated £362 billion, up 5% from £345 billion in 2006, and above the CML’s forecast in October 2007 of £360 billion.

However, December gross lending declined to an estimated £22.6 billion, its lowest monthly figure since May 2005, but this was not a surprise in current market conditions. It was down 25% from £29.9 billion in November and 21% from £28.6 billion in December 2006. A 6% seasonal fall might typically be expected between November and December.

CML director general Michael Coogan commented: “The ‘credit crunch’ moved into its fourth month in December and continued to constrain the cost and availability of funds to lenders and, in turn, the cost and number of mortgage products available to borrowers.

“Looking forward, the recent decline in interbank lending rates and the prospect of further reductions in base rates in 2008 should provide some help to the market, although lending volumes are likely to remain weak for the next few months.

“Overall, despite the funding constraints caused by global conditions, the UK mortgage marketplace remains highly competitive and there will continue to be a range of good deals available to better risk borrowers.”