Homeowner Loans Fall, But Other Lending Up
Following a particularly good month for new loan approvals in December last year, January this year saw a significant down turn in the number of new home owner loan approvals, according to the latest figures from, the Bank of England.
The figures show that there were only 48,198 new loans approved for house purchase throughout the month of January, compared with 58,223 in December, as many buyers rushed to beat the end of the stamp duty holiday, and the six month average figure of 55,924.
Most experts are not concerned about the drop in new loan figures and usually expect a drop at the start of the year, which has only been exacerbated by the end of the stamp duty holiday and the particularly bad weather conditions.
Despite the low numbers for new loans, the net amount of consumer credit through secured loans actually increased by £1.5 billion, which is above both the figure for December and also the six month average of just £1.0 billion.
Although consumer credit lending has seen an average repayment over the course of the past six months, during January consumer credit agreements on credit cards increased by £0.2 billion and borrowing on personal loans and unsecured loans increased by £0.3 billion.
Simon Rubinsohn of the Royal Institute of Chartered Surveyors (RICS) said “Our judgement is that this downturn in transactions will prove temporary and that buyer interest will have rebounded in the February data.”
“Lack of mortgage finance or the requirement for relatively large deposits, remains an issue as does the absence of sufficient good quality properties for sale. even so, we still expect the number of mortgage approvals granted per month to quickly climb back to the high 50,000’s seen at the back end of last year.”
