January mortgage lending at sharp low

Posted: 20 Feb 2009 08:35:01 GMT

Figures from the Council of Mortgage Lenders (CML) show that gross mortgage lending for the month of January dropped to just £12.4 billion.

January 2009 saw an eight per cent drop on the amount of money lent for mortgages since December 2008 and a total 52 per cent decline year-on-year.

Such a fall in mortgage lending can have a negative effect on house prices, which will continue to fall as long as buyers cannot reach the market.

As such, homeowners that need to sell their property could instead choose to do so online, which could attract a greater number of buyers, potentially slowing the effects of any falls in the value of the market.

Commenting on the figures, Bob Pannell, CML head of research, said: "Mortgage lending activity continues to be very weak and while people are searching eagerly for some signs of recovery, it would be unrealistic to expect a meaningful revival in lending in coming months.

"Even when conditions do improve, gross lending will be one of the later measures to recover."

As a result of the recent eight per cent month-on-month fall in mortgage lending, January 2009 has now become the month with the lowest level of mortgage lending since April 2001.



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