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Written by rosalind renshaw

The housing market began this year with a Christmas hangover as lending for house purchase fell dramatically from December.

There were 35,600 loans (worth £5.3bn) taken out for house purchase in January, according to the latest figures from the Council of Mortgage Lenders. This was a fall of 25% by volume and 24% by value on December.

Although it was a rise from the year before (22% by volume and 23% by value), January 2011 was a particularly poor month for lending.

The number of first-time buyer loans in the first month of this year followed a similar pattern – up 23% by both number and value from January 2011, but down by 30% in both number and value from December 2011.

In total, there were 13,200 loans to first-time buyers this January, with an average loan to value of 80%. There were 22,400 loans to home movers.

Remortgaging levels also fell in January, down by 6% in value from December, and also down by 13% from January 2011.

Paul Smee, director general of the CML, said: “We traditionally see a substantial fall in lending figures at the start of the year, reflecting the lack of enthusiasm by buyers to move house during the post-Christmas months, and this January has been no exception.

“But the year-on-year rise in house purchase lending suggests that lending levels are generally rising, although we expect the trajectory to be bumpy rather than smooth this year.”

Also coming out with new mortgage figures was the Financial Services Authority, reporting on the final quarter for last year.

It said that new advances in the quarter amounted to £40bn, 8% lower than in Q3, but around 9% higher than in Q4 of 2010.

In Q4 there were 34,600 new arrears cases which was down 1% on last quarter and 14% lower than in Q4 2011. The number of new possessions in the quarter fell by 9% to 8,827.

Comments

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    A note to the chap below,

    Thank you for you valuable advice, very knowledgeable, concise, detailed, calmly laid out and absolutely correct.

    Sadly, its not really got much to do with the headline but definitely has a place here somewhere for any EA that wholeheartedly argues for ever increasing prices to consider.

    To return the favour lets me walk you through the EA business; In December we exchange and complete on lots of sales – the Christmas period means buyers and sellers are keen to get transactions concluded and combined with the solicitors, lenders and so on they generally pull together.

    In January we don’t complete many sales, this is because November and December are poor months for new sales and everyone has done their best to have Christmas dinner in their new house.

    Less mortgage offers are issued and less mortgage funds are advanced in January than December. This is a pattern regardless of credit conditions and the market it’s the long standing relationship between these two months and its always been the same.

    Nice to see the year on year up a bit though eh?

    Jonnie

    • 15 March 2012 12:11 PM
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    For the average estate agent let me walk you through the real basics here. The market is determined largely by the supply of credit, as the supply of credit gets tight one or both of the factors determining the market level must change. This is either the price or the volume. Put simply, as credit tightens, you can hold up the price if you like, but volumes will collapse. Or you can collapse price and volumes will be high. But you cannot have high volumes and high prices, not without high supply of credit.

    Although I will concede it is not necessarily that simply. You can substitute credit for plain old cash, if you can get cash rich older generations to become amateur landlords, you can preserve prices and some sense of volume that way, although eventually this will dry up. And you are left with the need to either have low volumes or low prices, but not both.

    Estate agents would actually benefit from high volumes far more than high prices. But almost to a man, they all defend high prices over high volumes.

    • 14 March 2012 10:42 AM
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    .......and the corporates are putting their fees down......and Rightmove are putting their fees up.................we're all doomed I tell ye we're all doomed!!!!!!!!!!!!!!!!!!!!!!!!!!

    • 14 March 2012 08:34 AM
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