Mortgage lending hits 8-year low

By Harry Wallop, Consumer Affairs Editor Published: 11:23AM GMT twenty-three February 2010

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Previous of Images Next The housing marketplace enjoyed a convene during 2009, as a necessity of supply, forced home buyers to bid up the cost of majority houses Kate Barker warned the housing marketplace could be diseased during 2010 Photo: JASON ANDREWS

The finish of stamp avocation service at the begin of the year has helped means a estimable drop in debt lending during January, with only �8.02 billion lent during the month, the lowest turn given Mar 2001.

This compares with an normal monthly volume of about �18 billion during 2007.

More than 2,000 opposite mortgages accessible Skipton faces authorised plea over rate climb Barclays cursed for overdraft rate climb House prices to climb far crook than formerly likely Home owners check remortgaging Rental total soar as home owners diminution

The data, expelled by the British Bankers" Association, are the ultimate total to indicate the economy will go on a delayed recovery, after signs of confidence at the finish of last year. A heading part of of the Bank of England"s Monetary Policy Committee warned currently that the housing marketplace could be "weak" during 2010.

The housing marketplace enjoyed a convene during 2009, as a necessity of supply, forced home buyers to bid up the cost of majority houses.

However, majority of the homes being paid for are being snapped up by income buyers. Anyone who needs to steal income to buy a residence the infancy of consumers are anticipating entrance to income really tough.

Banks and construction societies, disturbed about the doubt in the economy, are still really demure to magnify income to any home owners but a undiluted credit score. The remortgaging marketplace when home buyers take out a new loan to reinstate a understanding that have come to an finish has all but dusty up. Many owners have opted to compensate the bank"s customary non-static rate, rather than emporium around for a improved deal.

Just 20,252 loans for remortgaging were lengthened during January, the lowest series for over a decade.

Also, the finale of the stamp avocation legal holiday has influenced as majority as 55 per cent of the houses on the market. Last year any one shopping a home value less than �175,000 was free from tax. The starting point has given been lowered to the strange turn of �125,000. This has helped pull down the series of mortgages for residence buyers from 45,650 in Dec to 35,083 in January.

Kate Barker, a part of of the MPC, looming prior to the Treasury Select Committee but vocalization on a personal basis, said: "The majority poignant subject is how far is debt lending going to be calm going forward?"

She pronounced the lending total referred to it competence be utterly calm and there competence "still be adjustments in the housing market."

"I was utterly astounded by the strength of prices last year. It is probable the housing zone will go on to be utterly weak."

Ed Stansfield, skill economist at the forecasting residence Capital Economics, said: "It will be a prolonged time prior to housing marketplace wake up earnings to pre-crisis levels."