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Significant drop in mortgage loans

18 February 2005

Gross mortgage lending dropped in January to £17.9 billion.

The data, released by the Council of Mortgage Lenders (CML), shows a 16 per cent drop from December's levels.

More significantly there has also been an 18 per cent drop on the figure for January 2004; this shows that the changes are not simply seasonal.

The bulk of the decrease was in lending for house purchases; remortgaging levels fell only marginally.

Peter Williams, CML deputy director general was not surprised by the decrease. "Overall the picture is consistent with the CML's expectations of a cooler, but still active, housing market," he said.

As well as mortgage lending decreasing, the number of loans for house purchase also fell by 26 per cent between December 2004 and January of this year.

Mr Williams added: "These figures show beyond doubt the recent slowdown in the housing market.

"Confidence measures suggest that consumers began feeling more confident again in January, and this coincides with anecdotal evidence from estate agents suggesting a pick up in sales."