The Council of Mortgage Lenders (CML) announced a record fall in UK mortgage lending in January 2013, with the slowdown starting since April 2012.
There was only a total of £10.4 billion pounds lent out to homebuyers last month, showing a 9% decline from December. On the other hand, this figure was 3% lesser than the amount in January 2012.
The CML however is keeping its hopes high and still looking forward to any development within the next months.
The Council of Mortgage Lenders (CML) announced a record fall in UK mortgage lending in January 2013, with the slowdown starting since April 2012.
There was only a total of £10.4 billion pounds lent out to homebuyers last month, showing a 9% decline from December. On the other hand, this figure was 3% lesser than the amount in January 2012.
The CML however is keeping its hopes high and still looking forward to any development within the next months.
The news though will appear as a blow to the reports of the Office for National Statistics (or ONS) and the Bank of England that the house purchase activity has shown signs of recovery.
The flow of funds to homebuyers has been slowly improving, as reported by the Bank of England and experts have been anticipating good figures.
A scheme, the Funding for Lending (FLS) was created in August last year to improve the industry. In line with its attempt to boost lending, £60bn was funded to banks and building societies provided loans will be available for their clients.
According to the CML, the continuous rise in inflation rate will make it difficult for Brits to obtain mortgages. However, Caroline Purdey from CML said that they are still positive that the scheme will be a great help to improve the situation despite the pressures.
Ashley Brown of the mortgage broker Moneysprite said, "While the January figures are down, there is plenty of activity in the market, and this should feed through to more positive figures in the coming months".
He also shared sentiments of positivity despite saying that the figures were not expected considering the funding from the FLS and the low mortgage rates in the market today.
Meanwhile banks and building societies have made their share and started a cut down on rates by 0.3%. In exchange, borrowers need to make a 30% deposit and pay £1,000 in charges. Still, homebuyers are still reluctant to take out loans.
In other places, the FLS is not even gradually making a push.
Olive Blake of Reeds Rains estate agents said, "The rise in lending due to the Funding for Lending scheme has been slow to feed through into Wales, as the economy is weaker than in England". He said that the profits made have already tapered off.
Survey results showed that in the last 12 months, £2,000 had been removed from the average price of a house in Wales. This was confirmed by the house price index LSL Property Services and Acadametrics Consultancy derived. House prices some parts of Wales were reduced by 8% and had continued to dip in the previous month.
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