Gross lending reached an estimated £362 billion last year, a 5 per cent increase on the £345 billion reported in 2006.
Not only did it exceed all previous lending levels, but 2007's figure also surpassed the CML's annual prediction by £2 billion.
The rippled effect of market conditions did eventually hit gross lending figures though, declining in December to an estimated £22.6 billion - the lowest monthly figure since May 2005.
CML director general Michael Coogan said: “The ‘credit crunch’ moved into its fourth month in December and continued to constrain the cost and availability of funds to lenders and, in turn, the cost and number of mortgage products available to borrowers.
“Looking forward, the recent decline in interbank lending rates and the prospect of further reductions in base rates in 2008 should provide some help to the market, although lending volumes are likely to remain weak for the next few months.
“Overall, despite the funding constraints caused by global conditions, the UK mortgage marketplace remains highly competitive and there will continue to be a range of good deals available to better risk borrowers.”
Agreeing with Coogan's positive outlook is Andrew Montlake, partner at Cobalt Capital, although he said he was hardly dancing with joy upon hearing of the December lending figures.
“There is a very good chance of an interest rate cut in February, and at least one more during 2008, which will incentivise borrowers and restore much needed confidence," he said. "We're by no means out of the woods yet but I'm confident things will be a lot rosier by Spring.”
