There were 19,000 loans advanced to first time buyers January, down 27% on December and 14% compared to January 2014. These loans by value were £2.8 billion, which was down 26% on December and 10% down on January last year.
The data also shows that home movers were advanced 22,400 loans, a decline of 24% compared to December and 17% down year on year. These loans totalled in value £4.2 billion, 24% down on December and 14% down compared to January 2014.
However, remortgage lending increased month on month with 25,600 loans advanced, up 15% on December but 12% down on January 2014. The value of these loans at £4.1 billion also increased month on month by 21% but was down 5% year on year compared to January 2014.
There were 18,200 buy to let loans in January, up 6% on the previous month and up 12% on the same period in 2014. These loans came to £2.5 billion in value, unchanged compared to December but up 14% on January 2014.
‘The traditional beginning of year seasonal lull in lending is slightly more prominent in house purchase lending than in previous years, especially in comparison to the particularly strong levels at the start of 2014,’ said Paul Smee, director general of the CML.
‘Affordability constraints remain a factor for would-be borrowers, but we are still projecting lending to pick up over the next few months. Increases month on month in remortgaging, both for home owners and in the buy to let market, are welcome given the recent static nature of remortgage activity. Interest rates are looking unlikely to go up in the very near future and the greater availability of good mortgage rates has probably motivated people to look at a change,’ he explained.
As previously reported, gross mortgage lending reached £14.8 billion in January. This represents an 11% decrease from December’s gross lending total and is 8% lower than lending in January 2014.
The CML also pointed out that the data on which the results are based on the Financial Conduct Authority's statutory reporting, which is currently in a transition phase following the implementation of the Mortgage Market Review. As a result this month's data may be subject to greater revisions than usual reflecting the transition arrangements.
According to Adrian Gill, director of Your Move and Reeds Rains estate agents, the data shows how the mortgage market has changed its’ spots in the last year. 'Lending has been tamed as new regulations and affordability checks have strengthened the borrowing process. Mortgage brokers are doing a more robust job and buyers are get sturdier solutions at the end of it. Although mortgage approvals are now running at more manageable levels than they were this time last year, the first time buyer market is still showing more energy than it has during any January since the recession hit, 2014 excepted,' he explained.
'January is only the opening stretch of the track in 2015, and activity will turn the first bend as front end demand picks up and starts to translate to moves on the ground. Once the short term uncertainty of the looming general election is defused, we should see demand increase,' he said.
'Across the country, there is still an acute hunger for home ownership and this is feeding off some favourable economic conditions. Saving a deposit is still tough going for many while saving rates remain low but crucially, it’s been getting easier as wages pick up, stamp duty is slashed, and inflation stays at rock bottom. Attractive mortgage products and more affordable house price prices are propelling lots more buyers into action, and with good deals to be had, the housing recovery has a solid footing for the coming year,' he added