Hopes have been raised that the housing market might soon start moving in the right direction after it was revealed mortgage lending edged slightly higher in 2011.
Gross mortgage lending across the whole of last year was some 3% higher than in 2010, according to the latest data from the Council of Mortgage Lenders (CML).
This was thanks largely to a marked pick up in lending activity during the closing months of the year.
Indeed, lending in December was 12% higher than in the same month in 2010, making it the fifth month in a row of higher year-on-year lending.
It also meant that lending totalled an estimated £37.3 billion in the fourth quarter of 2011, slightly down from £39.2 billion in the previous quarter, but 11% higher than the last three months of 2010, when £33.6 billion was approved.
This in turn meant that over 2011 as a whole estimated lending totalled £140 billion, slightly above the CML's forecast of £138 billion, and 3% higher than the £136 billion lent in 2010.
CML chief economist Bob Pannell said there is a 'glimmer of light ahead for households in that real incomes could stabilise and perhaps even start rising by the end of the year'.
"But, continuing Eurozone problems mean that mortgage funding prospects are uncertain, so overall UK mortgage market conditions for the year ahead remain difficult to call," he added.
Meanwhile, Peter Rollings, CEO of estate agent Marsh & Parsons, said the consistent annual improvement in lending in the last few months should go some way towards dispelling the doom and gloom surrounding the current mortgage market.
"Although the Eurozone crisis still lingers in the background, lenders are acclimatising to the difficult economic environment and improving their offering to borrowers nonetheless.
"For instance, HSBC recently pledged to boost its level of support to the mortgage market this year – a welcome sign of confidence in the direction of housing market.
"While we don't anticipate mortgage lending to return to anywhere near it's pre-crunch peak level, if other lenders follow suit and lending conditions continue to improve, we may see the wider national housing market moving in the same direction as London as the year progresses."
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