Cookies at Which? We use cookies to help improve our sites. If you continue, we'll assume that you're happy to accept our cookies. Find out more about cookies

Mortgage lending falls 32% in January

Data shows significant ‘seasonal dip’
A for sale sign

Gross mortgage lending declined by 32% in January 2010, falling from £13.4bn in December to just £9.1bn last month.

New data from the Council of Mortgage Lenders (CML) has revealed the sharp drop in borrowing, which has resulted in the lowest monthly lending figure since February 2000.

Last month’s total lending figure was also the lowest for any January since 2000, and represents a year-on-year decline of 21%. In January 2009, a total of £11.5bn was lent to mortgage borrowers – £2.4bn more than was advanced in January 2010.

Stamp duty holiday and seasonal decline

While there is usually a ‘seasonal dip’ in lending between December and January, the CML confirms that this year’s fall was unusually steep. Its report suggests housing market activity was boosted towards the end of 2009 by a number of borrowers trying to complete their house purchases before the end of the stamp duty holiday.

CML economist Paul Samter commented: ‘We remain in a period of uncertainty for the housing market and the economy at large.

‘Recent developments have been influenced by the end of the stamp duty holiday, and are likely to foreshadow a larger than usual seasonal drop off in activity in the early part of this year.’

Get the best mortgage for you

If you’re on the hunt for a new mortgage deal, you’ll need to consider whether a variable or fixed rate mortgage is the right choice for you. You can find out more about how different mortgage deals work by reading our Mortgage deals explained advice guide.

While tracking down the cheapest mortgage rate is important, you also need to ensure you look at the total cost of the deals you are comparing – including fees for services such as valuation and application processing.

The Which? mortgage finder is also an excellent tool for comparing mortgage products. It searches the market and compares the total cost of each deal it finds, taking into account the fees and charges to ensure you aren’t caught out unexpectedly.

pound coins

Which? Money when you need it

You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.

Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.

Or for money-saving tips, and news of how what’s going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.

Back to top