UK Mortgage Lending Down in January

UK Mortgage Lending Down in January

UK mortgage lending fell to £9.1 billion in January, a 32% drop from £13.4 billion in December and down 21% from £11.5 billion in January 2009, according to the Council of Mortgage Lenders.

CML represents banks, building societies and other lenders who together undertake around 94% of all residential mortgage lending in the UK.

It says a decline is typical between December and January.  However, this is the lowest monthly total since February 2000 (£7.9 billion) and the lowest January total since 2000 (£7.4 billion).

The “larger than average drop” between December and January this year indicates house purchase activity in December received a significant boost from borrowers .

Economist Paul Samter commented:

“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 average drop 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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