CML: Mortgage lending down 29% in January

CML: Mortgage lending down 29% in January

The Council of Mortgage Lenders (CML) has today reported mortgage lending plunged in January.

Mortgage lending fell by 29% in January on a monthly basis, while lending was also 12% down on the year.

There were just 28,500 approvals during the month - the lowest level since February 2009.

The Council highlights that traditionally December and January are quiet months but this slump was greater than expected and was not just attributed to seasonal factors and there are fears of another downturn.

The CML has previously said the housing market will remain subdued in 2011, due to uncertainty surrounding the economy and the ongoing mortgage rationing by lenders.

The CML comments: “With the effects of last year’s government spending cuts beginning to bite, and rising inflation and tax measures putting pressure on household budgets, potential house-buyers are likely to have been discouraged.

“This, coupled with December’s extreme winter weather, and uncertainty over future interest rate rises, has led to a lack of movement in the mortgage market,” it added.

In the meantime, there was a sharp fall in the number of first-time buyers obtaining a mortgage, with just 10,500 people buying their first home - 28% lower than December and also the lowest amount since February 2009.

First-time buyers have been struggling for some time now to get on the property ladder unless they have a deposit of at least 25%.

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