Mortgage lending to homebuyers slumped by almost a half in January, as the end of the stamp duty holiday took its toll on the property market.
The Council of Mortgage Lenders (CML) approved only 32,000 loans during the month, 49% fewer than in December, but still up from the low of 23,000 seen in January 2009. Unsurprisingly, first time buyers were hit the hardest amongst homebuyers, recording a 54% monthly drop in loans approved. Meanwhile, remortgage activity dropped to the lowest level seen in the eight years in which data has been gathered.
Just 24,000 loans were approved for remortgage in January, 15% down on the previous month and 47% lower than a year earlier. Commenting on the figures, CML director general Michael Coogan, said it had been a quiet start to the year, but one that was not unexpected, given the boost the impending end of the stamp duty holiday had had on December’s data.
“When December and January data are taken together, they show little change in underlying market conditions compared with recent months, with activity still slow but well up on the lows of a year earlier,” he added. “We expect lending over the coming months to remain weak as uncertainty over of the state of the economy and the upcoming election are likely to continue to hold back housing market activity.”
eMoneyfacts
Justin Moy