The UK unemployment figures surprised everyone last week, and this week it is the turn of Mortgage figures. Mortgage lending has been described as “surprisingly strong” in December, confounding fears to the contrary. 

The Council of Mortgage Lenders (CML) said UK mortgage lending increased by 14% in December compared with November, to £13.7bn. 

The latest figures from the CML also show that UK mortgage lending was up 3% in December compared with the same month a year earlier. 

The word surprisingly is being used by analysts as seasonal factors usually mean a slowdown in December compared with November. The evidence suggests that the rise this year was driven by a surge in house purchase completions. 

The most likely explanation is that buyers of cheaper property wanted to complete their transactions before the end of the year to beat the end of the stamp duty holiday. 

Despite the stamp duty holiday ending, analysts are predicting that the mortgage market will be stronger in 2010 than in 2009. 

One factor that will slow the reduction of pressure in the mortgage market is that savers will once again expect to receive pre-crisis levels of interest on their savings. 

Traditional building society models see a direct link between the interest given to savers and the income from mortgage borrowers.  

One analyst recently describes savers as the “forgotten victims of the credit crunch”. That may have been so but their money is now in hot demand as banks - in particular those that have been nationalised or part nationalised - continue to reduce their reliance on the wholesale markets. 

This, coupled with the rates payable by the government’s National Savings and Investments, has driven up the cost of retail funding to an unprecedented level relative to mortgage rates.

The Halifax has released a new report this week which suggests that houses are less affordable than 50 years ago, but the quality of the homes available has improved. 

The lender, now owned by Lloyds Banking Group, said that over the last five decades UK house prices have risen by 2.7% a year, allowing for inflation. This was above the 2% annual increase in real earnings over the same period.  

Prices increased the most in the last decade. 

The Halifax study considered the state of the market in the half century from 1959 to 2009, believing that the last 50 years have witnessed some remarkable developments in the UK housing market. 

The Thatcher government’s Right to Buy policy, instigated in the 1980s, brought about one of the most significant shifts in the market. 

Because of this policy, owner-occupation in the UK accelerated the most in the 1980s. The Halifax figures show that 43% of homes were owned by their residents in 1961 compared with 68% in 2008.  

Privately rented homes fell from 33% to 14% over the same period, although it has crept up in the last 20 years or so, probably owing to the increase in student numbers.  

Four big house price booms have occurred in the last 50 years, the research concluded. They were: 1971-73, 1977-80, 1985-89, and 1998-2007.  

Over the last 50 years, the biggest rise in prices was in greater London, whereas the smallest increase was in Scotland. This might have been mitigated, to a degree, by an increase in homes with two incomes rather than just one.  

In a sign that buyers might be getting more for their money now, the proportion of households without an inside toilet fell from 14% in 1960 to 0.2% in 1996.  

A basic hot water supply features in all homes, unlike 22% of them in 1967, and central heating has also become the norm.  

House-building levels have fallen, but the proportion of households that were occupied by just one person rose from 19% in 1971 to 33% in 2009, the Halifax said. This is likely to have added to pressure on affordability of smaller homes for first-time buyers. The Council of Mortgage Lenders (CML) has said that the proportion of the average first-time borrower’s income spent on mortgage interest payments dropped in November 2009 to its lowest level for six years, at 14.4%.  

However, the deposit demanded by lenders remained high - typically at 25%.  

The requirement for large deposits is likely to continue to constrain the market, particularly first-time buyers, for some time to come.