The number of loans advanced totalled 40,600, down 1% on January and 16% compared to the same month in 2014. These loans totalled £6.8 billion, which was down 3% on January and 13% on February last year.
Lending to first time buyers was down 1% month on month and 16% compared to February 2014 with just 18,700 totalling £2.7 billion, which was down 4% on January and 13% down on February last year.
Home movers were advanced 21,900 loans, a decline of 2% compared to January and 16% down year on year. These loans totalled in value £4.1 billion, 2% down on January and 13% down compared to February 2014.
Remortgage lending also decreased month on month with 21,500 loans advanced, down 16% on January and 14% down on February 2014. The value of these loans at £3.3 billion also decreased month on month by 20% and was down 11% year on year compared to February 2014.
Even the buy to let sector, considered to be buoyant at present declined. There were 15,900 buy to let loans in February, down 13% on the previous month but up 11% on the same period in 2014. These loans came to £2.2 billion in value, down 12% compared to January but up 16% on February 2014.
Paul Smee, director general of the CML, blamed seasonal factors for dampening house purchase lending activity in February but admitted the general election could be making people wait and see.
‘This typical seasonal trend may also be exacerbated by uncertainty ahead of the general election, but we still expect to see an upturn in the spring and summer months. Buy to let, in contrast, has shown year in year lending increases, due almost completely to remortgaging which is typically strong in the buy to let market,' he added.
According to Richard Sexton, business development director at e.surv, there have been fierce debates over the problems of the property market ever since the election campaigning began but so far there scant solution and in the meantime, first time buyers have been caught in the crossfire.
'Luckily, a mortgage rate price war and the government’s Help to Buy scheme are providing uniquely favourable conditions for prospective home owners. But an odd wind of political uncertainty is holding many borrowers back. Meanwhile the Bank of England’s regulatory toolkit seems ever-poised to expand, so uncertainty seems to be the byword of 2015,' he pointed out.
'That said, while recent months have been a rough patch for mortgage lending, it isn’t forever. If anything, it’s a testament to the stability of today’s house purchase mortgage market that we can ride out these pre-election nerves. Lenders appears keen that to ensure that the supply of affordable mortgage deals will still be there when demand picks up again,' he concluded.
Karen Bennett, sales and marketing director of commercial mortgages at Shawbrook Bank agreed that there could be a general election effect with the forthcoming poll creating a feeling of uncertainty combined with the continued impact of tighter lending criteria on owner occupiers.
‘As part of this, we are seeing the more specialist buy to let market stabilising, with less rapid, but still robust, growth than in previous years. As professional investors continue to expand their portfolios and add value by refurbishing or renovating, the signs are there for a continuing strong mortgage market. In order to ensure market sustainability, brokers should always encourage responsible borrowing by clients,’ she added.