Gross mortgage lending in the U.K. rose 0.9 percent in November to a 12-month high of 12.9 billion pounds ($21 billion), according to the Council of Mortgage Lenders.
The increase left gross lending 2.6 percent lower than a year earlier, the figures published in London today show.
The CML said the mortgage market had done better this year than previously forecast and there are “grounds for optimism” that the recovery will continue in 2013, helped by the Bank of England credit-boosting program known as the Funding for Lending Scheme.
“Whereas the FLS was conceived by the U.K. authorities to mitigate the worst impacts of a potential fresh credit crunch, its launch has in fact coincided with a more positive external funding environment, in part due to European Central Bank actions,” CML Chief Economist Bob Pannell said in the statement. “Given this more benign context, in our view the FLS now has the potential to underpin a modest pickup in mortgage lending activity.”
The number of property transactions would increase to 950,000 next year from 930,000 in 2012, with 156 billion pounds of gross lending and 12 billion pounds of net lending, the CML said. Activity will slow in 2014 after the FLS drawdown window ends, it said.
There are likely to be 35,000 home repossessions this year, 10,000 fewer than previously forecast, it said, predicting a similar number of foreclosures in 2013.