This is the highest lending total for a January since 2008 (£25.2 billion).
CML economist Mohammad Jamei said:
"Lending started the year on a positive note. Our monthly estimate is 21% higher than a year ago, with the current growth rate in lending similar to the closing months of 2015.
"UK market fundamentals are helping to underpin this recovery, with real wage growth, an improving labour market, competitive mortgage deals, and government schemes all supporting household demand. We still only see limited upside potential going forwards, as the number of properties for sale on the market remains low and affordability pressures weigh on activity. Upcoming tax changes in the buy-to-let sector are adding an element of uncertainty to the market."
John Eastgate, Sales and Marketing Director of OneSavings Bank, added:
“A sluggish start to 2016 tells us more about a seasonal lull in buyer activity at the end of last year, than it does about any long term indication of the market’s health. Conditions for mortgage borrowers are, if anything, likely to improve, with the prospect of interest rate rises pushed further out thanks to the economic uncertainty that has plagued markets since January. On top of that, we have moderating house price inflation and strong employment data. The caveat is that we still need to see more on the supply side; house sales are a third lower than their pre-crash levels and we still fail to build enough.”
Jeremy Duncombe, Director, Legal & General Mortgage Club, said:
“January saw a significant increase in lending compared to previous years as the growth in house price inflation drove lending beyond what we would normally see at the beginning of the year. It is therefore crucial to note that the annual rise in gross mortgage lending largely reflects an increase in the size of loans rather than the number secured."
