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Last Updated: Tuesday, 20 December 2005, 11:49 GMT
Mortgage lending picks up again
Browsing an estate agents window.
Mortgage lending has picked up, even as winter approaches.
Mortgage lending has continued to show an unseasonal pickup as the year draws to a close.

The Council of Mortgage Lenders (CML) said gross lending rose by 5% in November to 28.5bn.

The CML said this was the second highest figure on record and was 30% higher than a year ago.

Separately, the British Bankers' Association (BBA) said net mortgage lending, which strips out redeemed mortgages, rose by 5.1bn last month.

That was the biggest increase since July 2004 and was higher than the average monthly figure of 4.4bn seen over the last six months.

The BBA's director of statistics David Dook said: "November's above average rise in mortgage lending reflects the recent upturn in approvals and provides more evidence that the mortgage market bottomed out in the summer and is now being underpinned by steady demand."

Remortgaging

Normally, demand for mortgages tails off towards the end of the year and then revives in the spring as people start house hunting again.

However, the CML pointed out that the figures were being bolstered by high levels of remortgaging.

This happens when people stay put but simply move their mortgages to another lender to take advantage of a more favourable deal.

This currently accounts for about half of all new house lending.

Although he described the property market as robust, the CML's director general, Michael Coogan, cautioned against expecting a big rise in prices next year.

"While it could be tempting to assume this strengthening will continue," he said, "our expectation for the coming year is of relatively subdued transaction levels, mortgage lending moderating a little from recent levels, and house prices rising by about 2%."

Rising prices?

Despite the CML's caution, other indicators suggest that house price inflation may be about to accelerate, at least gently, after falling steadily since the summer of last year.

The Royal Institution of Chartered Surveyors reports that in November, its members saw the first overall rise in UK house prices in 15 months.

The RICS asks its members who are estate agents if they have seen prices rise or fall in their area during the previous three months.

In November, 4% more reported a rise than a fall.

That came after inquiries from buyers rose for the sixth month in a row. The RICS said this was the longest spell of rising inquiries since 2001.

At the beginning of December, the country's biggest mortgage lender, the Halifax, said that house price inflation had gone back up to nearly 5%





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