Whereas the start of 2014 witnessed a flurry of mortgage lending to house purchasers and remortgagors, January 2015 has been more muted, with gross mortgage lending dropping by 11% from December and 8% year-on-year to total £14.8 million.
According to the latest figures released by the Council of Mortgage Lenders (CML), loans advanced to first-time buyers and homemovers were at some of the lowest levels seen in recent years.
In January, loans to first-time buyers totalled 19,000, which marks a staggering 27% drop from December and a marked 14% fall from January last year. Mortgage advances to homemovers fared little better, with 22,400 loans extended – a decline of 24% compared with December and 17% lower than in January 2014. These figures mark the lowest monthly level in 21 months for first-time buyers, while for remortgage loans this is the lowest monthly level seen since March 2013.
The value of these loans also decreased, with first-time buyer mortgages equating to £2.8 billion - down 10% year-on-year – while those to homebuyers fell by 14% from last year, totalling £4.2 billion.
Remortgage figures, meanwhile, were a mixed bag – the number of loans may have risen month-on-month by an impressive 21%, but on an annual basis the number of loans fell by 5%.
January usually experiences a slowdown in lending activity, but these lower figures are also a reflection of the slowing housing market, which has been cooling since last summer. The previous rapid increase in house prices and the ongoing effect of the Mortgage Market Review (MMR) have also probably taken their toll.
"The traditional beginning of the year seasonal lull in lending is slightly more prominent in house purchase lending than in previous years, especially in comparison to the particularly strong levels at the start of 2014," commented Paul Smee, director general of the CML. "Affordability constraints remain a factor for would-be borrowers, but we are still projecting lending to pick up over the next few months."
Lending figures may be down, but don't let this put you off. After all, these figures are following the impressive performance seen in 2014, which saw some of the highest lending figures since the housing boom.
Now is currently a great time to look to get on or move up the housing ladder, or to remortgage your home, as mortgage rates and fees are now sitting at record lows, meaning that the cost of borrowing is genuinely reducing. The prospect of a hike in interest rates has also faded into the horizon, meaning that the pressure on borrowers has eased. So, if you'd like to take advantage of the great deals on offer, check out our top mortgage deals and our selection of the best remortgages. Don't let a good bargain pass you by!
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