Mortgage lending by building societies increased markedly in January, but it has been warned that a lack of first-time-buyers is harming the housing market.
Figures from the Building Societies Association (BSA) show that residential mortgage lending rose by more than a third (38%) to £1.4 billion in January, easily beating the January 2010 total of £1.0 billion.
However, the figures are slightly misleading as lending in January last year would have been down because of the number of people rushing through their mortgage to beat the end of the stamp duty holiday at the end of 2009.
"Mortgage lending by mutuals in January was up year-on-year, although the comparable figure for January last year was depressed, as it followed the termination of the last Government's stamp duty holiday that ceased at the end of 2009," said Adrian Coles, director-general of the BSA.
"On a seasonally adjusted basis, mutuals' mortgage lending and approvals figures for January were broadly similar to the averages over the preceding six months."
Separate research from Nationwide has revealed that a lack of first-time-buyers is having a major impact on prices and activity.
"The fact that first time buyer numbers are well below the levels prevailing before the financial crisis casts a shadow over the outlook for the wider market," said Robert Gardner, chief economist at Nationwide.
Figures show that house prices inched up by 0.3% in February compared with January, but are down 0.12% year-on-year.
With a lull in prices, low first-time-buyer numbers and a levelling out in demand, the housing market is said to be 'treading water' at present.
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