Mortgage lending falls in January
Mortgage lending for property purchases in the UK during January reached the lowest monthly level the country has seen since February 2015. Loans advanced for buying homes reached an almost two-year low according to the latest figures from the Council of Mortgage Lenders (CML).
Just £8.4 billion was borrowed by home buyers in January, which is a decrease of 28 per cent compared to December. A total of 45,700 loans were approved, which is also 28 per cent lower than December and represents a one per cent fall when compared to the same month last year.
There was a decline in mortgages taken out by first-time buyers in January, with 29 per cent fewer than in the previous month. However, the number was nine per cent compared to January 2016, which is a positive step.
Paul Smee, director general of the CML, said: "January gives the impression of a flattish market overall, albeit one with a resurgent remortgage sector. We expect a seasonal dip in activity in the winter months and this appears to be the case in January.
"However, the lull in moving activity appears stubbornly persistent, and we have commissioned research on the reasons why the number of transactions seems in secular decline."
While buy-to-let loans saw a fall compared to January 2016, there was an 11 per cent rise by value and 12 per cent by volume month on month. This could be a sign that more landlords are looking to invest in property in 2017, but it will be a few months before we see if this trend continues.
Increases in rental demand suggest that 2017 is a prime time for landlords to broaden their portfolios in order to make the most of the number of people looking to rent rather than buy.