January mortgage lending at ten year low

Friday, 19 February 2010 11:37

By myfinances.co.uk staff

The monthly gross mortgage lending figure for the UK fell by just under a third in January to an estimated £9.1 billion, the latest figures from the Council of Mortgage Lenders (CML) have revealed.

It blamed the massive decline in lending, down from £13.4 billion in December, on the rush to complete mortgages ahead of the end of the stamp duty holiday at the end of 2009. That led to a lack of interest from potential buyers as the tax was reintroduced on properties worth more than £125,000. During 2009 stamp duty was only payable on property worth more than £175,000.

January's gross mortgage lending figure is the lowest monthly total since February 2000 (£7.9bn) and the lowest January total since 2000 (£7.4bn). It also represents a 21% fall from the £11.5 billion lent in January 2009.

CML economist Paul Samter, said "We remain in a period of uncertainty for the housing market and economy at large. The market certainly improved over the second half of last year and started 2010 in better shape than most would have predicted twelve months ago. More recent developments have been influenced by the end of the stamp duty holiday, and are likely to foreshadow a larger than usual seasonal drop off in activity in the early part of this year.

"However, the Bank of England is likely to keep rates low which should continue to mitigate mortgage payment problems and help cushion borrowers from the worst of the recession."

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