UK Finance has estimated that gross mortgage lending in January totalled £21.9bn, 9.7% more than a year earlier and slightly above the monthly average of £21.4bn for 2017.
Shaun Church, director at mortgage broker Private Finance, said: “The mortgage market started 2018 with a bang, as gross mortgage lending soared by 10% year-on-year. While there may be whispers of a housing slowdown, these figures demonstrate that buyers are eager to get on the ladder and banks are looking to lend.
“With speculation of further interest rate rises to come in 2018, borrowers should act soon to lock in competitive rates. With a flurry of remortgage activity in January, existing homeowners are already shopping around to capitalise on the favourable rates on offer.
“Those with remortgaging still on their ‘to-do list’ should act soon to ensure they secure the best possible rate. With inflation rising, savings stagnating and wage growth slowing, mortgage rates are one of the few market conditions currently working in the consumers favour.”
UK businesses’ deposits grew by 7% in the past 12 months, while borrowing over the same period contracted slightly by 1.4%. Within business sectors, manufacturers’ borrowing expanded modestly, while construction and property-related sectors contracted.
Meanwhile, card spending was 5.8% higher than in January 2017, although higher repayment levels meant that the pace of borrowing saw little change, growing at 4.8% annually.
Eric Leenders, managing director, personal finance at UK Finance, said: “January saw higher levels of repayments on credit cards, which is expected at this time of year as customers pay off their festive spending. Meanwhile, households were careful with their outgoings as wage growth remains below the inflation rate.
“Gross mortgage lending in January increased by almost 10% compared to the same period last year, and was higher than the monthly average, as customers took advantage of mortgage deals on offer at the end of 2017.”
Stephen Pegge, managing director, commercial finance at UK Finance, added: “Business sentiment remains positive with confidence in short term trading conditions buoyed by the recovery in international markets. Investment levels remain broadly unchanged and borrowing continues to err on the side of caution, as companies adopt a ‘wait and see’ attitude to trading uncertainties, opting to use their deposits as buffers for spending decisions.”