Although 2011 closed with more mortgage lending activity and a higher level of housing transactions, the Council of Mortgage Lenders points out this is coming from low levels, and cautions against reading too much into those recent figures from the Bank of England. Gross lending reached £13.2 billion in November which is 7% higher than in October and 15% more than November 2010. However the CML is estimating that gross lending will have dropped to £11.7 billion in December which is mainly due to the holiday season, but even so this figure would still be 12% higher than December 2010 and would represent the fifth monthly increase on lending. This would give a total amount for the whole year of £140 billion which is slightly more than 2010.

The CML's Regulated Mortgage Survey shows a more stable housing market during the last few months of 2011. They are predicting the first half of the year will remain weak for the housing market, but think falling inflation levels could lead to real income levels stabilising which would do a lot to boost consumer confidence and could help the housing market during the second half of the year. Although inflation has come down to 4.2%, it remains to be seen if it can drop to 2% by the end of the year. The first quarter of the year could see an upturn in the number of first-time buyers anxious to take advantage of the current stamp duty exemption which expires at the end of March.