January rise in mortgage lending

January saw an 11% rise in gross mortgage lending, despite the uncertainties surrounding the housing market.

Figures from the Council of Mortgage Lenders put gross lending for January at around £26.5 billion compared to £23.9 billion in December of last year.

However, the December figure was 25% behind November and the lowest monthly figure since May 2005.

The CML is expecting lending to decline in the coming months and the mortgage market to be mainly driven by remortgaging.

Michael Coogan, CML director general, comments: “Gross lending held up well in January. However, there is considerable uncertainty in the housing market at the moment and we expect lending volumes to be lower in the coming months.”

Mr Coogan is calling on the Government to reduce stamp duty because he believes “home buyers might be more inclined to transact if their moving costs were reduced”.

Meanwhile, Kate Barker, a member of the Bank of England’s Monetary Policy Committee, is of the opinion that falling house prices and reduced mortgage lending are the biggest short-term threats to the UK economy.

In its January survey of members, the Royal Institution of Chartered Surveyors (Rics) found that the number UK surveyors reporting house price falls grew for the sixth consecutive month.

The pattern is reminiscent of Rics data from the housing recession of the early 1990s.

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