As purchasers of cheaper properties rushed to complete their transactions before the end of the government's stamp duty holiday that ended with the year, December saw an unexpected jump in mortgage lending by 14% as stated the latest statistics on the activity.
According to the Council of Mortgage Lenders (CML), as compared to the £12.1 billion in November, more than £13 billion was advanced during December. Comparisons in the lending market were positive for the first time since October 2007, as lending was 3% higher than in December 2008.
However, sceptics warned of getting too optimistic on the strength of the unexpectedly rosy picture since it was obviously a momentary phenomenon. With the onset of the new year, purchases on properties worth £125,000 would again attract a levy as the stamp duty holiday would end. Buyers were obviously only trying to get a good deal. Remortgaging was still very weak. Therefore, the New Year could witness a slowdown in the early part of 2009 with a hope of resurgence later in the year.
"With a gradual pick-up in economic growth and wider access to credit, 2010 will almost certainly be a better year in the mortgage market than 2009", stated CML economist Paul Samter.
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