Gross mortgage lending increased by 8% in 2015, according to the Council of Mortgage Lenders (CML), bringing the total for the year up to £220.3 billion.
2015 was the fifth consecutive year for gross lending growth with 2014’s gross lending total coming to £203.3 billion.
For December, gross lending dipped from £20.5 million in November to £19.9 but was up 22.7% on December 2014.
CML economist Mohammad Jamei puts the growth down to a strong second half of the year.
Mohammad Jamei said: “The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals all helped to underpin demand,” he said.
“Having said this, the upside potential looks limited over the near-term, as the supply of existing and new properties on the market remains weak, and affordability pressures weigh on activity.
“There is an added element of uncertainty as we wait to see the impact of tax changes on the buy-to-let sector.”
Richard Sexton, Director of e.surv chartered surveyors, said: “House purchase lending has been rejuvenated over the past year and with the second half of 2015 looking stronger than the first in lending terms, the trend looks positive.
“Small-deposit lending has been transformed by a renewed enthusiasm to help first-time buyers cross the threshold of homeownership, as evidenced by the number of higher LTV products available.
“Supply issues have become more of a factor in some areas as we head towards the turn of the year, as both growing demand and house prices finally get the attention they deserve from the government, but limited choice of affordable homes is certainly proving a challenge to some buyers. Alongside this obstacle, higher stamp duty changes are finally making their mark upon the top end of the market.
“Undoubtedly, 2016 looks set to bring challenges and opportunities for lenders, with the Mortgage Credit Directive and a potential interest rate change on their radar.”
