Mortgage lending and approvals fell in January
Gross mortgage lending fell to £28.3bn in January from £29.2bn in December, figures from the Bank of England (BoE) showed.
Approvals for house purchase also dropped in January, to 98,994, a slight fall from 102,800 in December.
However, the national lockdown and impeding end of the stamp duty holiday did not deter buyers too much: approvals and gross lending figures remained above monthly averages for the previous six months.
There was an average of £26.7bn lent each month for the six months to January, while approvals averaged at 91,920.
Mortgage approvals were higher than pre-pandemic levels, with an average of 67,900 applications approved each month.
The modest slowdown in business in January also affected remortgages, which saw a monthly decline to 32,367 from 33,667.
Low rate market
The average interest rates on newly-drawn mortgages declined slightly to 1.85 per cent, suggesting borrowers were taking advantage of the current low interest environment.
This was in line with the average rate in January 2020 and slightly above the recent low in August, where the average rate fell to 1.72 per cent.
The average rate on outstanding stock of mortgages also fell to a low of 2.09 per cent.
‘Perfect storm’ for mortgage activity
Mark Harris, chief executive of SPF Private Clients, said: “January may not be a time of year generally associated with a flurry of activity in the housing market, but on the mortgage side, business was robust with approvals and borrowing remaining strong.
“Borrowers took advantage of incredibly low interest rates, whether it was to make a move or to take some equity out of their homes and improve what they have.”
Richard Pike sales and marketing director at Phoebus Software, added: “In all honesty our market has fared better than many over the past year and January was no exception.
“The perfect storm of low mortgage interest rates and the stamp duty holiday have kept things moving.”