CML news & views

The end of the stamp duty holiday had a predictable impact on lending, which was sharply down in January, according to our data. But when December and January are taken together, there was little change in underlying market conditions compared with recent months. Activity was limited, but well up on the low point of a year ago.

Lending is likely to remain weak in the coming months as uncertainty about the state of the economy and the general election hang over the market.

The re-introduction of stamp duty on properties priced between £125,000 and £175,000 had a dramatic impact on the market. It contributed to a 49% decline in the number of house purchase loans in January. In the same period, the number of remortgage loans (which are unaffected by stamp duty) declined by 15%.

But while January’s total of 32,000 house purchase loans, worth £4.7 billion, represents a slow start to the year, it was a considerable improvement on the 23,000 loans for house purchase, worth £3.1 billion, advanced in January 2009.

Conversely, remortgaging in January was running at around half the level of a year ago. There were 24,000 loans, worth £3 billion, in the month, compared with 45,000, worth £6.2 billion, a year ago.