Mortgage lending celebrates record year

The past year has been a fine one for mortgage lenders, new statistics reveal.

Gross lending stood at £29.4 billion in December, helping the year to record figures of £346 billion, a 20 per cent rise on 2005, according to the Council of Mortgage Lenders (CML).

The December figure was 11 per cent down on the record £33.1 billion posted the previous month but eight per cent up on the £27 billion lent during December 2005.

It is thought that a 14 per cent rise in house sales coupled with a seven per cent improvement in prices during the course of the year was largely responsible for the upsurge in lending.

The CML director general Michael Coogan is confident that 2007 can improve upon the previous year.

"Many of the key drivers of the market remain positive," he said.

"The economy is healthy, demand for housing is strong and house prices continue to rise. As a result, mortgage lending this year is expected to be even higher than in 2006."

He did suggest, however, that recent interest rate rises might prevent some potential buyers from entering the market.