January produced some encouraging numbers for the UK house lending market.  Original loans for houses numbered 65,184, according to figures from e.surv chartered surveyors.  This level of lending has not been seen since February of 2008.  Months leading up to that time were rich in activity for both original loans as well as remortgage loans as well.  The latest surge was prompted by several factors.

Overall, mortgage rates have fallen, more financial products are now available, and house buyers are demonstrating a higher amount of confidence in the market.  Many analysts within the market also see the government backed Funding for Lending scheme as another catalyst for growth in housing.  December mortgage approvals did not even reach 55,800 in number.

Loans of all types increased through the month of January, but first timers and loans with high Loan to Value made up a bigger percentage.  As the weather continues to improve, many see the number of remortgages increasing as well.  The remortgage product itself is still often overlooked, even though it has many potential advantages to offer any homeowner.

Richard Sexton, business development director of e.surv chartered surveyors, commented on the latest spike in lending activity, saying: “These are the most encouraging signs for the mortgage market since the financial crisis. After an inauspicious start last autumn, Funding for Lending has come good.”

Sexton added: “It has flooded lenders’ balance sheets with cheaper funds, which has encouraged them to reduce mortgage rates to record lows and roll out a much wider range of mortgages for high LTV borrowers. It is helping clear the logjam in the first-time buyer market.”