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TODAY'S OTHER NEWS

Big rise in mortgage lending on back of more jobs and higher wages

Data from the Council of Mortgage Lenders shows that gross mortgage lending reached £17.6 billion last month - that's the highest February figure since the downturn was beginning in 2008.

The February 2016 figure is five per cent down on the previous month, reflecting the end of the New Year flurry of lending caused by purchasers wanting to beat the April stamp duty surcharge deadline. 

However, the CML figures show loans to first-time buyers totalled 11,429 in February, a significant increase on the recent past and a sign of a strengthening housing market according to some analysts. Perhaps more significantly, CML economist Mohammad Jamei says it is possible that there will be no UK interest rate rise this year, further bolstering buyers' confidence.

"Lending continues the year on a positive note, with our monthly estimate showing an increase of 30 per cent in February compared to a year ago. This growth rate is in line with what we saw in the closing months of 2015. The recovery is being underpinned by market fundamentals in the UK, as wages grow and unemployment falls, helped by government schemes and competitive mortgage deals" says Jamei.

"But we think it unlikely that there will be any significant acceleration in lending" he cautions. 

"While there may be a slight current boost to lending as some transactions seek to complete before the April 1 tax changes in the buy-to-let-sector, this is likely to be followed by a slight fall in activity. Affordability pressures continue to weigh on activity, as does the low number of properties coming on the market, though this has been improving very recently." 

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