January was a tough month for mortgage lending in the UK, as it was affected by severe winter weather and the end of the stamp duty holiday in December.
Mortgage advances, which is the actual amount given to a buyer, increased by 50 percent in February, but the number of remortgage loans declined by 35 percent. The first-time homebuyer market has significantly improved, up by 13 percent compared with January and 40 percent compared with last year’s.
Fixed-rate mortgages remained less popular than in the recent past. Tracker mortgages have more than a third of the market, which was largely attributed to Bank Rates being at an all-time low.
Bob Pannell of the Council of Mortgage Lenders (CML) said that the political uncertainty caused by the upcoming General Election meant that the housing market in the country will likely see little changes in the near future. However, the CML expects the first-time homebuyer market to be sustained by the new stamp duty exemption.
"The new stamp duty exemption for first-time buyers could boost the market somewhat and we hope to see the traditional seasonal pickup as the weather gets warmer and the days get longer,” said Mr. Panell.
"The start of the year is traditionally a quiet period for mortgage lending. This year, though, transactions have been affected by the ending of 2009’s stamp duty concession and the harsh weather, making it hard to identify clear trends in recent months."