Total net lending to individuals rose £2.0billion in January, according to the latest figures from the Bank of England, but mortgage lending was down.
There was a £1.5billion rise in net lending secured on dwellings, but this was lower than the previous month; there were 48,198 mortgages for house purchase taken out, lower than the 55,942 seen in December, remortgaging saw 23,611 loans, and other purposes accounted for 23,035 – both lower than the previous month.
Commenting on the mortgage lending figures, Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors (RICS) said: "Today's numbers from the Bank of England provide confirmation that mortgage lending activity took a tumble in January."
Mr Rubinsohn continued to explain that the reasons behind this decline in mortgage lending include the end of the stamp duty suspension on properties between £125,000 and £175,000, which ended at the start of 2010. He also suggests, as other market analysts have done, that adverse weather conditions might have deterred potential home buyers from venturing out.
But, Mr Rubinsohn predicts that mortgage lending is about to recover. "Our judgement is that this downturn in transactions will prove temporary and that buyer interest will have rebounded in the February data," he said. "Lack of mortgage finance, or the requirement for relatively large deposits, remains an issue as does the absence of sufficient good quality properties for sale.
"Even so, we still expect the number of mortgage approvals granted per month to quickly climb back to the high 50,000s seen as the back end of last year. Over the course of 2010, this figure should gradually climb to nearer 70,000."
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