Gross mortgage lending hits record levels in 2007

According to the Council of Mortgage Lenders (CML) mortgage lending figures for 2007 were the highest ever, coming in at £ 362 bn (EUR 487 bn), up 5% from the 2006 figures of £ 345 bn (EUR 465 bn) and above CML's October 2007 forecast of £ 360 bn (EUR 485 bn).

Against the backdrop of record figures though comes signs that the credit crisis is making itself felt. Gross lending for December 2007 sank to £ 22.6 bn (EUR 30.45 bn), the lowest monthly figure since May 2005. The December figures also represent a 21% drop from November’s and a 25% decline from lending in December 2006.

Michael Coogan, director general of CML commented, 'The credit crunch moved into its fourth month in December and continued to constrain the cost and availability of funds to lenders and, in turn, the cost and number of mortgage products available to borrowers. Looking forward, the recent decline in interbank lending rates and the prospect of further reductions in base rates in 2008 should provide some help to the market, although lending volumes are likely to remain weak for the next few months. Overall, despite the funding constraints caused by global conditions, the UK mortgage marketplace remains highly competitive and there will continue to be a range of good deals available to better risk borrowers.'