Mortgage lending falls again

The number of mortgages advanced to people buying a property dropped for the fifth consecutive month during December as activity in the housing market remained subdued.

Just 39,900 loans were advanced for house purchase during the month, 4% fewer than in November and the lowest level since February last year, according to the Council of Mortgage Lenders.



The figure was also 37% lower than it was in December 2009, when lending levels were boosted by people rushing through purchases to beat the end of the Government's stamp duty holiday.















The subdued figure reflects the fall in demand among potential buyers during the final part of last year, as uncertainty about the future direction of both the housing market and the wider economy caused people to sit on their hands.



Data for the year as a whole showed that mortgage lending stabilised during 2010, following sharp falls in each of the previous two years.



A total of 529,300 mortgages worth £77.1 billion were advanced for house purchase during the year, 3% more by number and 11% more by value than during 2009.



But the number of people remortgaging fell to a 13-year low of just 313,200, as record low interest rates and tight lending criteria meant many people were best off staying on their lenders' standard variable rate when their existing deal came to an end.



Remortgage numbers were 23% lower than in 2009, and accounted for just 29% of all advances during 2010.



Michael Coogan, director general of the CML, said: "2010 was about the mortgage market continuing to adapt to the post-credit crunch environment, and the full-year data shows that the lending industry is now on a more stable footing but at historically low levels of activity.



"House purchase lending held up, and shows the market is open for business. However, it is still not serving all customer groups that may want to borrow, in particular those without a significant deposit.



"Access to funding for lenders is expected to stay under pressure this year, but it will now be matched by lower consumer demand due to the economic backdrop and a range of uncertainties which will impact the timing of borrowing decisions."



The group is expecting gross lending levels to remain flat this year, but it has pencilled in a further fall in net lending, which strips out redemptions and repayments, to just £6 billion, down from a record low of £8.15 billion in 2010.



There was a fall in lending to first-time buyers in December, with 14,500 mortgages advanced to people buying their first home, 3% fewer than in November and 42% down on the level seen in December 2009.



There was also a further increase in the average deposit people had to put down, with this rising from 21% to 23%, but the proportion of their income that people spent on mortgage interest dropped to 12.9%, the lowest level since February 2004.



Only 6% of first-time buyer mortgages were taken out on an interest-only basis, well down on the 30% of loans that were interest-only pre-2007.

PROMOTED VIDEO
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
Sport
Bradford City's reward for their memorable win over Chelsea is a trip to face either Sunderland or Fulham (Getty)
football
News
Lars Andersen took up archery in his mid thirties
video
Voices
Focus E15 Mothers led a protest to highlight the lack of affordable housing in London
voicesLondon’s housing crisis amounts to an abuse of human rights, says Grace Dent
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Client Services Manager - Relationship Management - London

    £30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

    Recruitment Genius: Credit Controller / Customer Service

    £18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

    Guru Careers: In-House / Internal Recruiter

    £25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

    Recruitment Genius: Tax Assistant

    Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

    Day In a Page

    Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

    Auschwitz liberation 70th anniversary

    Woman sent to three Nazi death camps describes surviving gas chamber
    DSK, Dodo the Pimp, and the Carlton Hotel

    The inside track on France's trial of the year

    Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
    As provocative now as they ever were

    Sarah Kane season

    Why her plays are as provocative now as when they were written
    Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

    Murder of Japanese hostage has grim echoes of another killing

    Japanese mood was against what was seen as irresponsible trips to a vicious war zone
    Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

    Celebrities call on David Cameron to take more Syrian refugees

    One young mother tells of torture by Assad regime
    The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

    The enemy within

    People who hear voices in their heads are being encouraged to talk back
    'In Auschwitz you got used to anything'

    'In Auschwitz you got used to anything'

    Survivors of the Nazi concentration camp remember its horror, 70 years on
    Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

    Autumn/winter menswear 2015

    The uniforms that make up modern life come to the fore
    'I'm gay, and plan to fight military homophobia'

    'I'm gay, and plan to fight military homophobia'

    Army general planning to come out
    Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

    What the six wise men told Tony Blair

    Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
    25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

    25 years of The Independent on Sunday

    The stories, the writers and the changes over the last quarter of a century
    Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

    Homeless Veterans appeal

    As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
    Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

    Smash hit go under the hammer

    It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
    Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

    The geeks who rocked the world

    A new documentary looks back at origins of the computer-games industry
    Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

    Belle & Sebastian is taking a new direction

    Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea