Mortgages for buyers approach two-year low as market flattens

Data from the Council for Mortgage Lenders show that loans taken out by buyers have hit a near two-year low.

Home buyers borrowed £8.4 billion in January, down 28 per cent on December and unchanged on January 2016. This came to 45,700 loans. 

First-time buyers borrowed £3.6 billion for home-owner house purchase, down 29 per cent on December but up nine per cent on January 2016. They took out 22,600 loans.

“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 ... decline” explains Paul Smee, director general of the CML.

“Buy to let house purchase activity continues to be weak, despite strong buy to let remortgage levels. This will likely remain so going forward as lenders tighten affordability criteria ahead of the Prudential Regulation Authority-mandated stress tests, and the introduction of tax changes in April” he adds.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says his firm has noticed a pick-up in activity in recent weeks but warns: “Property must still be very compelling in terms of price, location and presentation - or all three - in order to gain attention from increasingly discerning buyers.”

Jackson-Stops & Staff chairman Nick Leeming says: “A reduction in the stamp duty burden at all levels would breathe life into the lethargic UK housing market and we are hopeful the Chancellor will give due consideration to this policy in the combined Budget and Autumn Statement later this year.”