Mortgage lending in February was up a healthy 12% following a bout of cold feet (and hands) that kept buyers at home during the January blizzards, the Council of Mortgage Lenders revealed today.
Sluggish mortgage sales in January were largely due to a slump after the ending of the stamp duty holiday in December, which has since been revived and raises the zero stamp duty threshold to £250,000 for first time buyers, fixed for the next 2 years.
The good news in February was that the 35,000 mortgage loans taken out marked an increase of 49% on year-earlier levels, while to total value of mortgage loans was £5bn, which was up by 67% on year-earlier.
These included 12,600 first time buyers mortgage loans, with deposits on average of 25% of property value. These mortgage loans amounted, on average, to 3.1 times household income, and first time buyers signed up to pay an average of 13.3% of their household income in mortgage repayments, according to the Council of Mortgage Lenders.
The fixing of the generous stamp duty threshold, although available only for first time buyers, is pegged as the significant market driver for the coming months.
“With the supply of credit still tight and the upcoming election causing political uncertainty, we are unlikely to see much change in the near future, although the new stamp duty exemption for first time buyers could boost the market somewhat,” said Bob Pannell, head of research for the Council of Mortgage Lenders (CML).
In the market for remortgages, February saw continued lethargy, with 24,000 remortgage loans of total value £3bn, down 35% on February 2009.
