The Council of Mortgage Lenders (CML) released its market commentary last week which indicated that, despite difficulties, the current outlook for the UK housing market is "positive".
The data showed "robust lending" in the last three months of 2012. The estimated £11.7 billion lent to mortgage borrowers in December pushed the total figure for 2012 to £143 billion. This was £2 billion higher than the previous year.
Whilst this only represents an increase of 1.4% over 2011's figures, the closing months of last year still hinted at a good start to 2013. That December saw over 8% of 2012's mortgage lending – despite the usual tendency for borrowing to decrease in the winter season – was encouraging, and the CML forecasts a total increase of 8.3% throughout this year to £156 billion.
Bob Pannell, Chief Economist at the CML and author of the market commentary, cited better availability and value of mortgages as the reason for the upward turn in 2012 and the good outlook for the next few months. Most months in 2012 saw lending above year-earlier levels.
The Building Society Association's (BSA's) quarterly Property Tracker survey examined, among UK adults, perceived barriers to property purchase. In December, 45% cited access to mortgage finance - this was down from 46% in September 2012 and also continues a strong downward trend since September 2011, when the figure was close to 60%. It has also decreased in relation to raising a deposit, whilst lack of job security is the only factor that has increased.
Both the BSA and CML have cited the Bank of England's Funding for Lending Scheme (FLS) as one factor which has been of potential benefit to the housing market.
Launched last summer, the FLS aims to give up to £60 billion to banks and building societies, who get to borrow the money cheaply on the condition that they lend it to individuals and businesses. However, the scheme is still in its infancy and according to the Bank of England only £4.4 billion was taken up – by just six lenders – in the first two months of the scheme. Due to this, rather than being a direct influence, the FLS is more likely to have afforded lenders 'room to breathe' and allowed them to loosen up their criteria to mortgage borrowers.