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12/03/2009 13:25:40

Mortgage lending in January decline

The mortgage market continued to experience difficulties over the course of January, figures from the Council of Mortgage Lenders (CML) indicates.

Findings from the industry body reveal that a total of 23,400 loans for the purposes of purchasing a home - worth £3,107 million - were approved during the month.

Such a figure represents a fall of 29 per cent from December and 59 per cent down from January 2008.

Those on the search for a mortgage product may also be interested to hear tracker deals accounted for 38 per cent of the market share in January, an increase from 35 per cent from December.

Meanwhile, fixed-rate mortgages accounted for 39 per cent of all new loans - the first time that such products made up less than half of all borrowing since March 2005.

Research from the CML also shows the typical first-time buyer requires a deposit worth 25 per cent of the total value of a home, as they took out a loan worth an average of £97,000.

"Mortgage affordability is good for those borrowers with deposits, but consumer confidence and lender appetite will remain muted in the face of rising unemployment and falling house prices," says Michael Coogan, director general of the CML.

Earlier this month, Neil Young, chief executive of the Young Group, claimed that the most recent base rate cut will be of little assistance to first-time buyers as mortgage lending criteria continues to be tight.