Although this is eight per cent down compared with the gross lending figure for December 2013, it is 33 per cent higher than the gross lending figure for January last year.
The housing market recovery has clearly gathered momentum and the Council of Mortgage Lenders (CML) says this is the busiest and strongest start to a new year since 2008.
Figures from the CML, which reports actual mortgages advanced to buyers, show that lending was up by one third on January 2013 figures.
Despite the dip following December’s mortgage figures, the CML still expects gross lending to increase by 15 per cent in 2014. However, it believes rises will moderate throughout the year because of affordability pressures.
Mortgage lending is still substantially below the peak levels set in 2007 when home loan lending reached £362.8 billion compared with £176.4 billion last year.
The increased activity has been boosted by an improvement in the domestic economy and government efforts to make mortgages more attainable, especially for first-time buyers.
Help to Buy, in particular, has made mortgages more affordable to new home buyers. The government has offered banks a guarantee on lending, for a small fee, and an interest-free loan to first-time buyers on part of their purchase of a new-build property.
CML chief economist Bob Pannell commented: “Housing market indicators in the UK continue to be positive, although seasonal factors are likely to have affected activity levels. Monthly approvals for house purchase averaged 70,000 in the final quarter of 2013, the strongest for six years.”
He cautioned against assumptions that the property market will accelerate sharply, despite the fact that the monthly approvals for house purchases averaged 70,000 in the final quarter of 2013 – the strongest for six years.
“The Bank of England envisages that approvals may climb to 90,000 a month in the second and third quarters of 2014. Unless the bank is expecting cash purchases to fall away sharply, this would seem to imply property transactions running at an annualised rate of one and a half million or so.
“We think this may be over-optimistic given the growing anecdotal reports of a shortage of prospective sellers.”