The number is up by £3.6 billion ($5.15 billion) since the beginning of the year, and up £13.6 billion ($19.4 billion) over the previous 12 months. This is the highest annual growth ever recorded, comfortably outstripping the previous high of £10.7 billion in the 12 months to September 1989, at the very peak of the last development boom.
The Bank of England monitors the figures closely to look for any warning signs of over-exposure among the banks to the highly cyclical property industry. It will have noted that total lending is now nearly 50 per cent up on the previous cycle's peak of £40.7 billion ($58.2 billion), and but so far there are no signs of the Bank asking lenders to show more caution. The Bank is thought to be taking a more sanguine approach because the lending is not being used to fuel a speculative development bubble.
According to Rupert Clarke, Managing Director of corporate finance at Jones Lang LaSalle, the lending figures reflect last year's record levels of property investment activity and the increasing trend towards highly leveraged deals on the back of low interest rates. He said most banks still have an appetite to increase their property loan books further.
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