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Residential property lending slides in January
15/03/10
Edited by Andy Jowett.New lending for residential property purchase declined in January as the end of the stamp duty holiday for homes valued at between £125,000 and £175,000 resulted in a sharp drop in the number of first-time buyers entering the market.
According to the Council for Mortgage Lenders (CML), there was a total of 32,000 loans worth £4.7 billion approved during the month, down 49 per cent on December.
Nevertheless, the number of mortgage deals was 38 per cent higher compared to the low of January 2009.
The number of first-time buyers securing a home loan was down 54 per cent on December at 11,300 deals worth £1.3 billion.
This drop off reflects the fact that these house hunters typically target homes in the £125,000 to £175,000 bracket.
In December, transactions involving first-time buyers and properties in this price band had surged by 63 per cent as consumers looked to beat the stamp duty deadline.
CML director-general Michael Coogan said: "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."
The average UK house price was £163,481 in January, according to Nationwide.
