Stamp duty holiday 'contributed to drop in mortgage lending'

Posted: 03 Mar 2010 11:11:02 GMT

The end of the stamp duty holiday, paired with the nationwide big freeze that was seen throughout January, has contributed to a "sharp drop in mortgage approvals", according to one expert.

Darren Cook, spokesperson for Moneyfacts.co.uk, says that there is usually a seasonal drop in mortgage lending in January but these other factors could have also had an impact on the state of the market.

His comments come in response to the recent Lending to Individuals report from the Bank of England, which reveals that the number of loan approvals for home purchases fell by 17 per cent between December and January.

Mr Cook goes on to add that many existing homeowners are deciding against re-mortgaging their property at the moment because interest rates are so low.

"There is little or no motivation for individuals to remortgage to another deal and restrictive lending criteria makes higher loan-to-value products expensive too," he states.

Data from the British Bankers Association shows that mortgage lending in January was down by a year-on-year figure of 17.5 per cent.

© Houseladder Ltd