Gross mortgage lending at 11 month high

The latest forward estimate from the Council of Mortgage Lenders indicates that total mortgage lending recovered to £12.9 billion in October.

If correct this would reverse the sharp dip seen in September and shown signs that market weakness is coming to an end.

CML chief economist Bob Pannell said: "House purchase and remortgage activity both appear to have picked up recently, and this should be supported by an improvement in the availability and pricing of mortgages.

"The Funding for Lending Scheme is likely to have made an early positive impact, helping to counter some of the negative pressures associated with a protracted and weak economic recovery."

Richard Sexton, director of e.surv chartered surveyors, was also quick to point to Funding for Lending: “The improvement is largely down to FLS, which has encouraged banks’ to increase lending.

“FLS has created a cacophony of debate, but it looks like we’re finally seeing it boost lending by supporting banks’ balance sheets with cheaper funds.”

Mark Blackwell, managing director of xit2, the survey, valuation and asset management data exchange specialists, advised caution: “It’s not time to get out the bunting just yet. The Funding for Lending Scheme has bolstered lenders’ balance sheets with cheaper funds, which has been the catalyst behind the improvement in lending over the last two months.

“Lenders are still relatively risk-shy as the market continues to reposition itself. Gross lending is still only 43% of its pre-2008 peak — while the mortgage market has retained some of its post-crisis weaknesses like stringent capital requirements, tight funding conditions in the money markets, and a chronic lack of confidence.”

Today's Conveyancer