The CML figures showed gross mortgage lending reached an estimated £362 billion, up 5 per cent from £345 billion in 2006. This topped the CML’s October 2007 forecast of £360 billion.
However, December gross lending fell 25 per cent on November to an estimated £22.6 billion – its lowest monthly figure since May 2005. The CML said a seasonal fall of 6 per cent was typically expected between November and December.
Meanwhile, the BSA found that gross mortgage lending ended the year at £52.1 billion compared to 52.8 billion in 2006, while net lending was hit hard, falling 20.7 per cent to £12.6 billion.
Nevertheless, the BSA had record savings inflows of £16.1 billion – almost double the 2006 figure.
Michael Coogan, director-general of the CML, said: “Looking forward, the recent decline in inter-bank lending rates and the prospect of further reductions in Bank of England Base Rates in 2008 should provide some help to the market, although lending volumes are likely to remain weak for the next few months.”
Adrian Coles, director-general of the BSA, said: “Gross lending by building societies was almost flat year on year, at £52.1 billion in 2007, compared to £52.8 billion in 2006. However, net lending by building societies was down by 20.7 per cent to £12.6 billion in 2007, largely because of higher interest rates in the mortgage market as a whole.”
Julie Gaskin, corporate relations manager for GMAC-RFC, admitted that the industry could expect a slow start to the new year.
She commented: “If you look at the figures, it will have been a year of two halves. There will be some lenders and balance sheet lenders that have a greater percentage of market share than historically and specialist lenders will have to adapt to the market. There will be a slower start this year, and then things will begin to pick up, but the full impact of the liquidity crisis, which is still affecting our market, is yet to be known.”
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