The Survey of Mortgage Lenders (SML) says mortgage sales are now falling as gross mortgage lending for December dropped 13% from the £24.6bn recorded a year earlier.
Figures released by the Council of Mortgage Lenders, found December to be up a fraction to £21.3bn compared with £21.7bn recorded in November.
Total lending for 2004 increased 5% from 2003 to be at £292bn.
Lending for house purchases, comprising 46% of all lending, at £9.8bn was up slightly from £9.1bn in 2003, but 22% lower than the £12.6bn figure during the same month in 2003.
Lending for house purchases totalled £130.8bn during 2004, up 5% from the previous year, and matched the sum borrowed in 2003 when the annual lending already hits its lowest level since CML records began.
First-time buyers comprised 31% (369,000) from a total 1.2m house purchase loans for the year, 2% higher than a year earlier.
Remortgage lending for December is nearly 10% down from November’s mark of £10.4bn.
CML director general, Michael Coogan says: “Going into 2005, we expect the slowdown to continue into the spring. Over the year as a whole we anticipate a stable market, with a healthy level of activity but without the dramatic increases in house prices and lending volumes experienced in 2004.”
Meanwhile, figures released by the British Bankers Association (BBA) suggest mortgage lending actually increased during December from previous months.
According to the BBA, net mortgage lending (boosted by £0.5bn of internal group transactions) increased by £5.7bn during the festive month with the underlying rise of around £5.2bn more than recent months.
Total sterling lending for the UK private sector strengthened by +1.5%, or £15.6bn to £1,078.8bn for December, up from £11.3bn in November and also above the £12.2bn average rise during the previous six months.
David Dooks, BBA director of statistics, says: “After four months of slower mortgage lending growth, December saw an underlying monthly rise similar to those seen in the first half of last year. It is likely, however, that this partly reflected a processing catch-up following the advent of mortgage regulation and the competitive attractiveness of specific products.”IFAonline
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