Mortgage lending in February hits eight year high, CML data shows

Gross mortgage lending in the UK rose 29.6% year-on-year to £17.6bn last month but was down 5% than the month before.

Data from the Council for Mortgage Lenders confirmed it was the strongest February for gross mortgage lending since 2008.

The CML, whose bank and building societies members provide around 95% of all residential mortgage lending in the UK, said it was unlikely that there will be any significant acceleration in lending.

"While there may be a slight current boost to lending as some transactions seek to complete before the 1 April tax changes in the buy-to-let-sector, this is likely to be followed by a slight fall in activity," said CML economist Mohammad Jamei.

Economist Howard Archer at IHS Global Insight said the strong annual increase was a likely consequence of both firm housing market activity and elevated remortgaging.

"Housing market activity is seemingly getting some boost at the moment from Increased activity from buy-to-let and second home purchases ahead of April’s rise in Stamp Duty," he said. "This could exert limited upward pressure on house prices in the near term."

Archer added that with fading expectations of an interest rate hike any time soon recently, there may be an easing back in the number of people feeling a need to re-mortgage in order to lock in low interest rates before they start to rise.