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Mortgage lending up six per cent in February

Mortgage lending up six per cent in February

Category: Mortgages

Updated: 18/03/2010
First Published: 18/03/2010

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Mortgage lending increased by six per cent in February, according to figures released by the Council of Mortgage Lenders (CML).

The rise was not unexpected as the market in January had been adversely affected by poor weather conditions and the end of the Stamp Duty holiday.

"An increase in lending in the shortest month is unusual but unsurprising this year," said the CML, which also predicted continuing price fluctuation in the coming months.

Lending by members of the council – made up of banks, building societies and other lenders which account for 94 per cent of mortgage lending in the UK – increased from £8.7 billion in January to £9.2 billion in February.

On an annual basis, lending fell by six per cent, but the first two months of 2010 are broadly in line with the CML's forecast of lending £150 billion in the year as a whole.

"As we look forward, we expect emerging signs of improvement as confidence in the economy grows and we move past the election. However, the need for the authorities to address fiscal deficit will inevitably slow the economy," said CML economist Paul Samter.

"At the same time the funding markets, while certainly better than a year ago, remain difficult and will limit the flow of available housing finance.

"Given the short term weakness and distortions in the housing market, as well as more properties coming onto the market, it was perhaps unsurprising to see falls in some of the monthly house price indices in February."

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