A record £346 billion was lent in 2006, according to data from the Council of Mortgage Lenders (CML). The figure – an increase of 20% on 2005 – was fuelled by an annual house price growth of around 7% coupled with a 14% increase in the number of house sales, say the CML.
December's gross lending figure alone hit £29.4billion – a record for the month –but still not as much as the all time high monthly total of £33.1billion, which was reached in November, but still up by 8% on last December's figure of £27billion.
Commenting on the figures, CML Director General Michael Coogan said: "The commentators who thought the housing market would crash in 2006 were wrong. Last year the market proved itself to be in robust shape and we expect it to remain so during 2007.
"Going forward, many of the key drivers of the market remain positive. The economy is healthy, demand for housing is strong, and house prices continue to rise. As a result, mortgage lending this year is expected to be even higher than in 2006.”
"But the recent increases in interest rates might make many aspiring home-owners think twice about getting on to the property ladder, and we expect to see levels of activity dampen as the year progresses."
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