This is down 8% compared to the gross lending total for December 2013, but experts point out that lending is still growing at a tremendous annual rate.
‘Housing market indicators in the UK continue to be positive, although seasonal factors are likely to have affected activity levels. Monthly approvals for house purchase averaged 70,000 in the final quarter of 2013, the strongest for six years,’ said CML chief economist Bob Pannell.
‘The Bank of England envisages that approvals may climb to 90,000 a month in the second and third quarters of 2014. This would seem to imply property transactions running at an annualised rate of one and a half million or so. We think this may be over optimistic given the growing anecdotal reports of a shortage of prospective sellers,’ he added.
David Brown, commercial director of LSL Property Services, said the figures indicate that current rates of growth are sustainable. ‘Lending is still growing at a tremendous annual rate. January may have been quieter than December, but last month is definitely on track given the usual seasonal dip we see at this time of year,’ he pointed out.
He predicts that ahead of the Mortgage Market Review there could still be an extra short term rush in the next few months but for now the mortgage market is on a steady trajectory gaining altitude.
‘For potential first time buyers every month like January is another where the chances could get slightly better for the right deal on the right property. But there are still serious headwinds for new buyers and a huge backlog of competition,’ he explained.
‘At some point this year, wages could start to really pick up. Growing salaries combined with a rejuvenated mortgage market could be the formula needed to really make a lasting difference for first time buyers,’ he said.
‘And in the meantime those still renting are enjoying slower rent rises as they do their utmost to build a deposit. More mortgages for landlords are proving useful, and the private rented sector is still expecting to withstand even more strain from rampant demand in 2014,’ he added.
