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• Total number of loans is less than half seen in January 2008
• Just 8,900 loans were advanced to first-time buyers
The number of mortgages advanced to people buying a home fell to a record low of 23,400 during January, the Council of Mortgage Lenders said today.
Continued falls in house prices and a lack of loans for those with small deposits were factors behind a slump in lending which saw the number of loans taken out by homebuyers drop by 28% from December's figure of 32,400.
The number was less than half of that recorded in January last year when 48,600 new loans were agreed.
Although cuts in the Bank of England base rate in December and January made borrowing cheaper for those with existing mortgages, lenders withdrew some of their cheapest deals for new customers, relaunching them with increased margins.
The decline in house purchase lending was spread evenly between first-time buyers and home movers. There were 14,500 loans to movers, down from 20,200 in December, and just 8,900 loans to first-time buyers, down from 18,000 in January 2008 when homes were much less affordable.
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