Mortgage lending in the UK dropped 14 percent to £10.5 billion (S$20.96 billion) in January, from £12.2 billion (S$24.35 billion) in the previous month.
However, the figure for January was still 10 percent higher compared to £9.5 billion seen during the same period last year, said the Council of Mortgage Lenders (CML).
Compared to a year ago, mortgage approvals in January rose 30 percent, reflecting the highest approval rate for the past two years.
Bob Pannell, Chief Economist at the CML, said the approaching deadline of the Stamp Duty Holiday could have a positive effect on home buyers.
“Housing and mortgage market sentiment has improved a little over recent weeks,” he said.
“The increase in lending compared to January last year helps support our view that housing and mortgage market activity may be boosted by first-time buyers seeking to complete deals before the stamp duty concession ends in March.”
Pannell is positive about the outlook of the UK mortgage sector, expecting lower inflation figures this year.
“Should inflationary pressures continue to fall back, the squeeze on household finances should ease progressively and help support stronger economic recovery going into the second half of the year. This can only be good news for the housing market further down the track,” he added.
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