Business

Mortgage lending strongest since 2008, says CML

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Mortgage lending rose to £21.8bn in October, up nearly 20% from a year earlier, according to industry figures.

The total was the highest since 2008, and growth in mortgage lending was also at a seven-year high, the Council of Mortgage Lenders (CML) said.

The CML said that total mortgage lending in 2015 was likely to beat its initial forecast of £209bn.

It added that housing market sentiment was set to be lifted as interest rates are unlikely to rise until 2017.

Lack of supply

The CML said Bank of England mortgage approvals data for September offered "mixed signals about the months ahead".

House purchase approvals dipped below 70,000 in September, while those for remortgages rose to 41,000.

The CML pointed out that the overall level of housing transactions in recent months had been slow and raised concerns about the low level of properties being offered for sale.

Despite the subdued number of property transactions, October's lending figure was 8% higher than September's total of £20.1bn.

Howard Archer, chief UK and European economist for IHS Global Insight, said mortgage lending was being lifted by many people remortgaging to try to lock in low interest rates before they start to rise.

"We expect house prices to see solid increases over the coming months amid healthy buyer interest and a shortage of properties," he added.

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