Stamp duty change sees mortgage lending slump
Mortgage lending slumped to an eight-and-a-half-year low during January as the housing market suffered a lull following the end of the Government's stamp duty holiday, figures showed today.
The major banks advanced just £8.02 billion during the month, 26 per cent down on December's figure and the lowest level since May 2001, according to the British Bankers' Association.
The group blamed the fall on a combination of people rushing through purchases during December to beat the end of the stamp duty holiday, and the wintry weather during January hitting market activity.
Lending had been unusually strong during December, with advances totalling £10.92 billion, the highest figure for more than a year, during what is traditionally a quiet month for the housing market.
The rise was attributed to people buying lower value homes pushing through purchases before the stamp duty threshold fell from £175,000 back to £125,000 at the beginning of this year.
The figures are in line with data reported by the Council of Mortgage Lenders for January, which showed that total lending had fallen to a 10-year low of £9.1 billion.
David Dooks, BBA statistics director, said: "It was no surprise to see the January mortgage figures falling back from December, when transactions were being pushed through to beat the end of the stamp duty relief.
"There was a natural reaction in the January figures and the bad weather further suppressed market activity."
The BBA figures also suggested that lending is likely to remain subdued during the first quarter of this year, with the number of mortgages approved for house purchase falling to its lowest level for eight months of 35,083.
The figure is 23 per cent down on the level reported for December, which had been the highest for 26 months.
Loans in the pipeline for people remortgaging also dived to a 10-year low of 20,252 during January, while the number of people taking out buy-to-let mortgages or releasing equity from their property fell to its lowest level since records began in September 1997.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "January's marked relapse in mortgage approvals was undoubtedly the consequence of both the very bad weather and some activity having been brought forward to late-2009 to beat the price threshold for stamp duty on house purchases moving back down from £175,000 to £125,000 at the start of January.
"The marked relapse in mortgage activity in January reinforces our suspicion that house prices are likely to suffer a correction at some point in 2010 and they will be essentially only flat over the year."
Unsecured lending remained subdued during January as the bad weather put people off shopping, while demand was also lower following Christmas.
People spent £5.6 billion on their credit cards during the month but, once repayments of £5.9 billion were taken into account, outstanding debt rose by £261 million due to interest and charges.
Borrowing through personal loans and overdrafts contracted for the 14th consecutive month with people repaying £334 million more than they were lent in January.
Savings levels also held up well, with people increasing their deposits by £2.46 billion, down on the previous month's figure but broadly in line with the recent six-month average.
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
The 'no-hang up' scam targets vulnerable people - and your bank may not protect you
Budget 2015: George Osborne is set to get tough with further cuts in public spending
Dirty tricks in a divorce can cause some nasty surprises
Women born in 1950s facing severe financial hardship over pensions could have fates changed by Ros Altmann - should she choose to help
If a bank calls about transferring money because of fraud, you risk losing your life savings
- 1 Man who was struck and killed by lightning in Brecon Beacons 'was carrying a selfie stick'
- 2 Lisa Randolph-Gant: Queen Elsa cake maker says she will carry on baking and will not let people 'break her spirit'
- 3 Tube strike: This pedestrian-friendly map tells you time it takes to walk between stations
- 4 Pamplona Running of the Bulls 2015: Three men gored and 10 hospitalised on first day of festival
- 5 Sarah Jessica Parker explains why she is not a feminist: 'It's not just about women now'
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
Greece debt crisis: Angela Merkel and Francois Hollande issue Athens with 24-hour ultimatum to avoid crashing out of the euro
Greece crisis: Referendum exposes a gaping hole at the heart of the European Union – its lack of genuine legitimacy
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
Day In a Page
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.