Mortgage lending slumps by half
Mortgage lending to people buying a home dived by 49% during January following the end of the Government's stamp duty holiday, figures have shown.Only 32,000 loans, worth £4.7 billion, were advanced during the month, around half the level seen during December, the Council of Mortgage Lenders said.
The group said the figures "emphatically demonstrated" the impact on the mortgage market of the end of the Government's stamp duty holiday.
The drop was even more pronounced among first-time buyers, with the number of mortgages advanced to people taking their first step on to the property ladder dropping by 54% to 11,300 between December and January.
There was also a 55% slide in the value of lending to this group, with advances falling to £1.3 billion.
The CML said the steep drop reflected the fact that a high proportion of first-time buyers bought properties priced between £125,000 and £175,000, and had rushed through purchases in December before the stamp duty threshold fell back to £125,000.
The group had reported a 63% jump in the number of first-time buyers purchasing homes in this range in December, but transactions in this band dived by 80% in January.
Properties priced between £125,000 and £175,000 accounted for just 19% of all first-time buyer loans during the month, compared with a record 42% in December.
But despite the steep drop in mortgages for both first-time buyers and home movers, the number of loans advanced for house purchase in January was still up from the low of 23,000 seen in the same month of 2009.
There was also a drop in the number of people remortgaging, with 15% fewer switching to a better deal in January than in December.
The CML said the steep drop reflected the fact that a high proportion of first-time buyers bought properties priced between £125,000 and £175,000, and had rushed through purchases in December before the stamp duty threshold fell back to £125,000.
The group had reported a 63% jump in the number of first-time buyers purchasing homes in this range in December, but transactions in this band dived by 80% in January.
Properties priced between £125,000 and £175,000 accounted for just 19% of all first-time buyer loans during the month, compared with a record 42% in December.
But despite the steep drop in mortgages for both first-time buyers and home movers, the number of loans advanced for house purchase in January was still up from the low of 23,000 seen in the same month of 2009.
There was also a drop in the number of people remortgaging, with 15% fewer switching to a better deal in January than in December.
© 2012 Press Association