The end of 2015 was a strong one for the UK housing market, with mortgage lending rates in December up 23% compared to a year earlier, despite dipping slightly from November.
Overall, the Council of Mortgage Lenders estimated that a total of £220.3 billion was lent out in 2015, making it the best year for mortgage lenders since 2008, and amounting to a jump of 8% compare with the year previous. The figure for December alone was £19.9 billion, up significantly from £16.2 billion the year before. Lending in the final quarter of 2015 was 1% higher than the quarter before, with an estimated total of £62.3 billion.
These figures are being hailed as signs of the UK 's steadily improving economy and job market, with Mohammed Jamei, an economist at the CML, saying: "The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals all helped to underpin demand."
Those seeking to explain what was described by Simon Rubinsohn, the chief economist at the Royal Institute of Chartered Surveyors (RICS), as "an unusually buoyant December" for the housing market have pointed to a variety of things.
One suggested factor was the announcement of tax changes that will be felt in the purses of landlords that caused something of a final surge in the demand for buy-let mortgages, as landlords seek to snap up properties before the tax changes come into force in April. This has led to predictions that the rising lending rates will continue across the coming quarter.
Rubinsohn said: "Those in the industry have been speculating that this is the result of the chancellor 's announcement last November. Potential buy-let investors are looking to pick up properties before the increased stamp duty levy comes into force in April. If that is the case, then we can expect to see the housing market heating up further over the next few months."
CML 's Mr Jamei, however, warned of the potential lack of longevity of this boost, saying that "the upside potential looks limited over the near-term, as the supply of existing and new properties on the market remains weak, and affordability pressures weigh on activity. There is an added element of uncertainty as we wait to see the impact of tax changes on the buy-let sector."
Another factor cited by many (including RICS) was the unusually mild weather, which they said was driving people to push deals through quickly, as developers and builders had more of an opportunity to construct more houses.
This suggests that the recently ever present discord between supply and demand may cause the market to slow down again as the mild weather ends and developing and building go back to the levels seen earlier in 2015.
Homes are continuing to rise in price in already expensive areas like London, where RICS reported a predicted increase of 5% a year until 2020. However, in the north of England, some 92% of RICS surveyors reported that they found prices to be basically reasonable across the board.