December saw mortgage lending rise, with buyers trying to beat the rise of the stamp duty that occurred on 1 January. However, last year saw home loans dropping overall, with the level dropping to the lowest in ten years and down by 43 per cent on 2008.
While the Council of Mortgage Lenders (CML) have seen their total lending last year come slightly above expectations to ?143.7 billion, they have also admitted that it was the lowest annual level since 2000, which saw it reach just ?119.8 billion.
Gross lending in December rose 14 per cent to ?13.7 billion. This was higher than the previous month but only just 3 per cent more than December the previous year.
Paul Samter, a CML economist, told Times Online how the incoming stamp duty helped increase mortgage lending: ?The December figure is surprisingly strong as there is typically a small decline in the month. Evidence suggests that the rise was driven by a surge in house purchase completions ? as remortgaging still remains exceptionally weak.
?The most likely explanation is that buyers of cheaper property wanted to complete their transactions before the end of the year to beat the end of the stamp duty holiday.?
The last three months of 2009 saw ?39.1 billion in lending, only just up from the previous quarter that saw ?39 billion in total. This was still 14 per cent lower then what was recorded on the last three months of 2008 though, which is more than twice the typical drop between the third and fourth quarter.
Mr Samter also told Times Online that a gradual improvement in the latter part of this year is likely, despite a large seasonal drop-off expected in the early months.
