Mortgage lending total edges higher (From St Albans & Harpenden Review)

Mortgage lending total edges higher

10:50am Thursday 18th March 2010 in

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Mortgage lending edged higher in February after diving by a third during the previous month, figures have shown.

Around £9.2 billion was advanced to borrowers during the month, 6% more than in January, when lending levels were hit by the end of the Government's stamp duty holiday, according to the Council of Mortgage Lenders.

The group said it is "unusual" for advances to rise during February, although it added that it is unsurprising this year as the December and January figures were distorted by the change to the stamp duty threshold.

Despite the rise, lending during February was still the second lowest since February 2000. It was 6% below lending levels for the same month of 2009.

Advances during the month were hit by a combination of the end of the stamp duty holiday and the wintry weather in January, which caused potential buyers to stay at home and had a knock-on effect on February's lending.

The fall in activity in the housing market saw Nationwide and Halifax reporting price falls of 1% and 1.5% respectively for February.

It remains to be seen if the drop was caused by one-off factors, or if it is the start of a new trend in the housing market, with many economists suggesting the recent recovery may have run out of steam.

Despite the low level of lending during January and February, the CML said the figures are broadly in line with its forecast that lenders would advance a total of £150 billion during the whole of 2010.