January mortgage lending down again

Date:Friday 13th March 2009
Author: Susanna Kavka

Mortgage lending continued to fall in January, according to new statistics.

The Council of Mortgage Lenders (CML) reported that 23,400 home purchase loans were made in the first month of the year, compared to 48,600 in January 2008 and 32,400 in December.

For home movers, the number of loans in January was 14,500, a decrease of 53 per cent from one year before and of 28 per cent from the previous month.

First-time buyers secured 8,900 loans in January, a drop of 51 per cent from the same month in 2008 and of 27 per cent compared to December.

The CML's director general, Michael Coogan, said that while lenders were giving loans, government action is "primarily focused on a few large banks".

He added that the increase in job loss and declining house prices are causing providers' willingness to lend to suffer, as well as consumer confidence.

Mr Coogan pointed out that several small, specialist and overseas lenders have withdrawn from the market, a sentiment echoed by the Royal Institution of Chartered Surveyors (Rics).

Rics also said that while it had seen buyer enquiries increase for four months in a row, aggregate lending had not reflected this.