January has seen a rise in the number of UK mortgage lending taking place, compared to the same month a year earlier, according to figures from lenders.
However, the typical seasonal fall that is seen every year meant that the lending seen was actually down on December’s figure, say the Council of Mortgage Lenders (CML).
Gross mortgage lending stood at £10.5bn in January of this year, which is down 12% on December, but up 10% on January 2011’s figure.
This latest data means that this was the sixth month in a row of higher year-on-year lending, according to the CML, but it has been warned that this was actually from very low levels of activity.
Chief economist for the CML, Bob Pannell, said: “The recent improvement in housing and mortgage market sentiment is welcome but we should be careful not to overstate its significance,
“Given the very low levels of activity we are starting from and the protracted and difficult economic rebalancing that the UK and other countries have embarked upon.”
Mr Pannell then added that “Some of the extra activity that has been seen could be attributed to first-time buyers trying to get onto the property ladder before the end of the stamp-duty concession”.
The 1% stamp-duty on first-time buyer mortgages taken out on properties worth between £125,000 and £250,000, will be reintroduced on the 24th of March this year.
The CML have said that if the falling inflation rate were to continue as it is, this would reduce the constriction on household finances and help with activity in the future housing market.
In related news, the average rent for properties in England and Wales increased in January, a survey conducted by LSL Property Services – who own Your Move and Reeds Rains – has suggested.
The investigation showed that the average rent rose by 0.1% in January, when compared to December, to £712 a month – which makes it the first January increase that the firm has ever seen.
Rent rose the fastest in areas such as the West Midlands and the South West, with London rents increasing by 0.8% giving it an average monthly rent of approximately £1,032 in the capital.
The biggest declines were seen in Wales, the North East and South East of England, with the cheapest average monthly rent being found in the North East at only £512.
“The rental market burst back into life unseasonably early in January, with tenants on the move trying to take advantage of what is usually a quieter period for the rental market,” said director of LSL, David Newnes.
“The depth of the underlying demand sustained a higher level of competition for rental property during the Christmas period, preventing more severe falls in rents than we’d normally see during the period.”
This article was written by Daniel from Which4u. For more information on the types of mortgages that are available, make sure you check out Which4U online.