London - British mortgage lending jumped last month to its highest level since October 2008 in the latest sign that government schemes to boost lending are breathing new life into the housing market.
The Council of Mortgage Lenders said gross mortgage lending rose to 16.6 billion pounds ($26 billion) in July, up 12 percent from June and a rise of 29 percent from a year ago.
Mortgage affordability has risen to its highest in generations thanks to record-low Bank of England rates and a state-backed scheme that offers subsidised funding for banks if they increase lending.
The combination of cheaper credit and rising optimism in Britain's economic recovery has fuelled a marked pick-up in house prices, with talk among some analysts of a housing price bubble. A survey by property website Rightmove showed property values rose 8.8 percent in the first eight months of the year.
“The mortgage market has been the pillar of the economic recovery,” commented Richard Sexton, director of e.surv chartered surveyors.
“Rates are at record lows, and there is a wider range of deals for borrowers to choose from than at any point since 2008.” -Reuters