The Council of Mortgage Lenders estimates that total gross mortgage lending declined to £10.4 billion in January. This is 9% lower than December’s gross lending figure of £11.4 billion and a 3% fall from £10.7 billion in January 2012.
Commenting on market conditions in this month’s market commentary, CML market and data analyst Caroline Purdey observes:
“Housing sentiment remains positive, despite ongoing economic pressures. A worsening in the outlook for inflation presents a greater headwind, but we still expect the funding for lending scheme to lift activity over coming months.
“House purchase activity was robust into the start of 2013, on the back of better mortgage availability and pricing, and we share the Bank of England’s confidence that this will continue over the coming months.”
Richard Sexton, director of e.surv chartered surveyors, commented:
“January’s figures actually mask a much broader improvement in the mortgage market. The Funding for Lending scheme is easing the paralysis of the mortgage market, and helped bump house purchase lending up to its highest level for five years in January. It’s pushed down rates, pushed up the number of new loans, and cleared the way for an improvement in high LTV lending in 2013.
First-time buyers are now finding it easier to get a mortgage, and don’t need to build such big deposits to get an affordable loan. Lending to borrowers with small deposits increased 30% in January, and was 13% higher than a year ago, suggesting life is becoming easier for new buyers.
The underlying demand for mortgage finance has been higher than the availability of it for quite some time: it’s good to see lenders are now able to cater for more of that demand, particularly to first-time buyers.”