Mortgage blog: Lending increases in 2013 but is yet to reach boom levels

Posted 27 December 2013 by Keith Osborne

New figures have revealed that 2013 was a better year than expected for the UK's mortgage industry. According to data from the Council of Mortgage Lenders (CML), lending has been higher than anticipated but has yet to reach the levels seen in the run up to the credit crunch.

Experts believe that it will be a number of years before the UK sees mortgage lending hit 2007 levels with the landscape of the industry having changed significantly over recent years.

UK far from reaching pre-credit crunch levels of mortgage lending

The latest figures from the CML show that lending in the UK in 2013 has been around 9% higher than forecast but is still less than half the peak reached before the global financial crisis.

CML chief economist Bob Pannell says: "Gross lending for 2013 looks set to reach £170bn - higher than the £156bn we originally forecast, but still a far cry from the £363bn experienced at the height of the lending boom in 2007."

According to experts, the UK is far from returning to pre-recession levels of mortgage lending. Keith Osborne, editor of, says: "Changes to the mortgage market and new regulations mean that lenders remain much more cautious than they were five or six years ago. While mortgage lending is increasing there are more stringent affordability checks, fewer high loan-to-value deals and no ‘self-certification' products. This means that it is harder to get a mortgage today than it was in the boom years and that means the market has a long way to go to reach 2007 levels.

"Mortgage lenders still have a lot of work to do to innovate and to help first-time buyers. However, there is clear evidence of a recovery and the government's withdrawal of key schemes suggests they want the market to grow under its own steam."

Risk-averse approach "deeply ingrained" in the mortgage market

Peter Williams, executive director of the Intermediary Mortgage Lenders Association, believes that a responsible, risk adverse approach has now become deeply ingrained in the culture of the mortgage market. He says that this can be evidenced by greater lending volumes but falling mortgage arrears and repossessions.

He says: "Today's CML figures and analysis show how far the mortgage market has changed in 2013 buoyed not least by a clear commitment from the highest levels of government to make getting a mortgage a far more realistic proposition than during the recession. With the new rules under the Mortgage Market Review coming into force in April 2014 it will be important to retain the balance between tighter controls and the real and still unmet homeowner ambitions that remain across the UK."

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