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.’
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