Over the year, remortgaging accounted for 38% of all lending at £83.6 billion, the highest figure on record.
Commenting on the figures, CML Director General Michael Coogan said: "As expected, 2002 proved to be the strongest year ever for mortgage lending. The conditions are in place for a soft landing for the housing market in 2003, but the market is not risk-free. We would urge borrowers to try to avoid borrowing up to the maximum limits, and to put down a reasonable deposit, if possible. This will reduce the risk of borrowers over-stretching themselves in a market where the future is uncertain."
Lending in December reached £19.5 billion, showing no sign of any seasonal slowdown, according to the figures. Remortgaging remained strong in December, accounting for 39% of the total. Lending for house purchase totalled £10.6 billion for the third consecutive month, accounting for 54% of the total.
On the basis of these figures, the CML expects to see strong lending continuing well into the Spring, but continues to predict a slowdown in growth later in the year.
Average affordability remains positive. First-time buyers are continuing to put down at least a 20% deposit on average, while movers are typically putting down deposits of at least a third of the value of their property. First-time buyers borrowed an average of 2.58 times income in December, while the equivalent figure for movers was 2.36.
Fixed rates swung back into popularity in December, accounting for 38% of all lending – the highest proportion since last January. This may be because people are beginning to factor in an expectation that the next move in interest rates will be up.
