This is a 5% fall month-on-month from January at £18.5bn but 30% higher than February last year at £13.6bn. This is the highest lending total for a February since 2008 when gross lending reached £24.1bn.
CML economist Mohammad Jamei, said: “This growth rate is in line with what we saw in the closing months of 2015. The recovery is being underpinned by market fundamentals in the UK, as wages grow and unemployment falls, helped by government schemes and competitive mortgage deals.”
Jamei doesn’t expect a significant lending acceleration but expects to see a rush to complete before the buy-to-let Stamp Duty changes on 1 April followed by a lull.
“Affordability pressures continue to weigh on activity, as do the low number of properties coming on the market, though this has been improving very recently.”
Steve Griffiths, head of sales and distribution at Kensington, said the industry must ensure that this rise in lending is not limited to those who tick all the boxes of a standard mortgage application.
If we really want to grow a healthy and fair mortgage market, the industry needs to recognise and promote the needs of the self-employed and contract workers as well as those credit worthy individuals who have experienced credit blips in the past and subsequently got back on their financial feet.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘While the industry absorbs the news in yesterday’s Budget, the mortgage market continues to tick over, with lending in February up almost a third on the same month last year.”
He added: “We expect this situation to continue in coming months. The challenger banks are keen to lend, while more established lenders also wish to bring in more business, which will be reflected in cheap rates and some tweaking of criteria. On the buy-to-let side, lenders will need to adapt to lending to limited companies as it looks as though an increasing number of investors will go down this route.”