Mortgage lending in the United Kingdom dropped 13 percent from December to January, hitting its lowest level in a year, said the Council of Mortgage Lenders (CML).
Lenders lent only £9.2 billion in January 2011, though this was still five percent higher than £8.8 billion in January 2010.
This was the first year-on-year increase since August last year, said CML. However, the mortgage market will likely stay subdued, due to the slow economic recovery and lack of demand.
Peter Charles, an economist with the CML, said, “Even in the unlikely event of a marked upturn in mortgage demand, the level of activity in the mortgage market can be expected to remain constrained.”
“As a greater degree of equilibrium is restored to financial markets, the availability of funding for mortgage lending should improve from current levels to support more normal levels of activity,” he added.
“However, the unprecedented expansion of wholesale funding, and hence mortgage lending, experienced in the mid 2000s is unlikely to return.”