Fall blamed on subdued activity in the
housing market during the second half of last year, leading to a lower
level of loans in the pipeline.
Mortgage lending slumped to a 21-month low in January as the market started the year on the back foot, figures showed today.
A total of £14.3bn was advanced during the month, the lowest level since April 2013, and 14 per cent below December’s figure, according to the Council of Mortgage Lenders.
The group attributed the dip to subdued activity in both the housing and mortgage market during the second half of last year, leading to a lower level of loans being in the pipeline for January.
A total of £14.3bn was advanced during the month, the lowest level since April 2013, and 14 per cent below December’s figure, according to the Council of Mortgage Lenders.
The group attributed the dip to subdued activity in both the housing and mortgage market during the second half of last year, leading to a lower level of loans being in the pipeline for January.
Bob Pannell, CML chief economist, said:
“The softer pace of approvals through the second half of last year
contributed to the relatively weak pace of mortgage lending in January.
“Although seasonal factors will continue to weigh on activity levels for a while longer, we expect the underlying picture to pick up over the coming months, in line with stronger earnings and employment, gentle interest rate trends and recent Stamp Duty changes.”
Despite the weak start to the year, he said the group still expected gross lending to reach £222bn this year, up from £204bn in 2014.
Today’s figures cover all types of mortgage advances, including lending to people buying a new home, those remortgaging and advances to buy-to-let investors.
A breakdown of the data will not be available until next month, so it is not yet clear if the drop was driven by a fall in one area, such as remortgaging.
Figures released by the CML earlier this week for December showed that mortgage lending for house purchase was 1 per cent higher by number and 3 per cent higher by value than in November.
Within the total, advances to first-time buyers jumped by 3 per cent in number and 6 per cent in value compared with the previous month.
The Bank of England also reported an increase in the number of mortgages approved for house purchase in December.
These figures are in line with other indications that suggest activity in the property market may be beginning to pick up again, after being subdued for much of the second half of last year.
A Bank of England report yesterday said estate agents and builders had reported seeing a pick up in sales since late December.
In the new build sector, house builders said they had seen improved levels of reservations, while across the rest of the market first-time buyers, people trading down the property ladder and buy-to-let investors were driving a new wave of demand for lower value properties.
Strong house price growth during 2014 has left the average British property costing £265,388.
“Although seasonal factors will continue to weigh on activity levels for a while longer, we expect the underlying picture to pick up over the coming months, in line with stronger earnings and employment, gentle interest rate trends and recent Stamp Duty changes.”
Despite the weak start to the year, he said the group still expected gross lending to reach £222bn this year, up from £204bn in 2014.
Today’s figures cover all types of mortgage advances, including lending to people buying a new home, those remortgaging and advances to buy-to-let investors.
A breakdown of the data will not be available until next month, so it is not yet clear if the drop was driven by a fall in one area, such as remortgaging.
Figures released by the CML earlier this week for December showed that mortgage lending for house purchase was 1 per cent higher by number and 3 per cent higher by value than in November.
Within the total, advances to first-time buyers jumped by 3 per cent in number and 6 per cent in value compared with the previous month.
The Bank of England also reported an increase in the number of mortgages approved for house purchase in December.
These figures are in line with other indications that suggest activity in the property market may be beginning to pick up again, after being subdued for much of the second half of last year.
A Bank of England report yesterday said estate agents and builders had reported seeing a pick up in sales since late December.
In the new build sector, house builders said they had seen improved levels of reservations, while across the rest of the market first-time buyers, people trading down the property ladder and buy-to-let investors were driving a new wave of demand for lower value properties.
Strong house price growth during 2014 has left the average British property costing £265,388.
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