Mortgage lending down in January
17/03/2015
Mortgage lending dipped unexpectedly in January, according to a report from the The Council of Mortgage Lenders (CML).
Just 41,400 home loans were granted to home buyers in the UK in January. This was down 16% on January last year, and 26% on December. The number of home loans given to first time buyers was 19,000, which is the lowest monthly figure for 19 months.
The UK property market has continued to cool since last summer. This is due to tighter regulations around mortgage lending thanks to the Mortgage Market Review (MMR) and rapid rises in prices shutting some people out of the mortgage market altogether.
The CLM also showed that sales in November, December and January have fallen from last year. This may start to pick up again soon though, as figures from the Bank of England have shown that mortgage approvals for those months - the number of new loans approved but not yet lent - in fact started growing again slowly.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
"January saw a bigger dip in lending compared with December than usual, which may partly be down to the flurry of activity at the end of last year to beat the stamp duty changes. Tougher rules introduced by the Mortgage Market Review (MMR) mean affordability is an issue for many borrowers, while more lenders may be offering higher loan-to-values, actually getting a big-enough mortgage can be more of a challenge, particularly in London and the south-east."
Need financial Advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Lloyds bank tightens regulations on interest only mortgages
Lloyds bank has this morning tightened its regulations on interest only mortgages suggesting that the sale of your main residence is no longer proof of an ability to repay your mortgage. The bank is now looking for additional investment vehicles such as endowments, pensions, Isas and share portfolios as backup in the event there is a shortfall on the sale of your main residence. While to some p...
Read MoreBank of England to reduce assistance for mortgage market
The Bank of England has today ruled out further assistance for the UK mortgage market with confirmation that the Special Liquidity Scheme which targeted lenders in the UK will not be extended past January 2011. For clarification, this is a totally different scheme to the quantitative easing program and was purely targeted at the mortgage arena. Mortgage lenders have reacted with surprise that t...
Read MoreHave the banks really signed up to the new mortgage rescue plan?
Despite assurances by Gordon Brown in Parliament yesterday there is some confusion as to whether any of the U.K.'s top 12 banks have actually signed up to his mortgage rescue plan which was announced yesterday. A straw poll of the U.K.'s leading banks suggest that many were surprised he commented upon the signing procedure as nobody is aware of the fine print as yet. To suggest that the UK banks h...
Read MoreFunding gap causes concern in UK mortgage market
It was revealed that gross mortgage lending between March and April fell by a significant 12% amid signs that the funding gap in the UK mortgage market is worsening. Since the credit crunch we have seen a massive increase in the cost of credit in the wholesale money markets although a variety of former government schemes have taken some of the pressure away from funding issues. However, a number o...
Read MoreShould mortgage companies help troubled homeowners?
Over the last few days there have been stories in the press regarding couples who are finding it difficult to keep up with their mortgage repayments, with many on capital and interest repayment deals. A number of homeowners have requested a temporary move to interest only mortgage arrangements although there appears to be resistance within the UK mortgage industry to allow this particular strategy...
Read More