According to the report, mortgage activity had been building through the year, mainly helped by an increasing numbers of first-time buyers.
Credit card spending decreased slightly in the month, with annual growth in outstanding credit at 5.3% and business borrowing continued to moderate, with the manufacturing sector showing only modest annual growth, while construction and property-related sectors have contracted their bank borrowing over the year.
Eric Leenders, Managing Director of Personal Finance at UK Finance said: “December is traditionally a quieter month for mortgages, although the underlying trend of increased numbers of first time buyers, supported by government initiatives such as Help to Buy, continues. Mortgage rates remain low, driven by a competitive market, so customers should shop around for the best deals.
Business lending is up year-on-year, even though December saw the usual seasonal net repayment across all industries and sizes of borrower. However, healthy export levels and an uptick in overall business confidence suggest that in this New Year, there may be an appetite to capitalise on opportunities for growth supported by continued favourable borrowing conditions.”
John Goodall, CEO and co-founder of buy-to-let specialist, Landbay, comments: “Mortgage lending volumes rode a steadily rising tide of first-time buyer and remortgage demand in 2017, and borrowing levels have continued to ride that wave in December. People are clearly still eager to take advantage of historically low mortgage rates, and good loan-to-value deals, locking into the security of fixed rate products in the face of a gradually rising base rate.
The stamp duty cut for first time buyers has brought new buyers into the market, and as far as buy to let mortgages go, we’ve already seen significantly more demand than at this point last year. There’s also a raft of two-year fixed deals about to reach maturity following the refinancing rush ahead of stamp duty changes in 2016, so there could still be more growth on the horizon.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "December was a quieter month for the mortgage market, as one might expect, with the festive season providing its usual distractions. That said, the number of first-time buyers continues to be strong, which is excellent news for the overall health of the market. Government initiatives, coupled with lenders’ efforts to lend at higher loan-to-values at competitive rates, are proving attractive to those trying to get on the ladder for the first time.
There is much speculation as to when interest rates will rise again but lenders remain keen to lend and there is more money available than people ready to borrow it, which will keep mortgage rates low at least for now."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, commented: "One of the most important ways of ensuring a healthy property market is accessibility to reasonably or competitively-priced finance. What these figures confirm is what we are seeing on the ground - in other words, lenders continuing to offer well-priced mortgages, particularly for first-time buyers keen to take advantage of the more level playing field with investors.
This is encouraging as first-time buyers are the lifeblood of the market. They generally trade up after a few years whereas investors tend to buy at the lower levels and stay there.
Looking forward, the numbers also bode well for 2018 if borrowers continue to take advantage of slightly more encouraging lending conditions."
