Fall in UK mortgage lending in January 2011

Government spending cuts, rising inflation and cuts and extreme winter weather conditions led to a fall of 26 per cent in house purchase lending in the UK during January. According to new data from the Council of Mortgage Lenders (CML), there were 28,500 loans for residential property purchases over the course of the month. The organisation said that the fall will ensure that the UK real estate market remains flat, although it added that one month's data is not conclusive of the overall trend. CML director general Michael Coogan, said that monetary pressures faced by homeowners in the country meant that the fall in lending was to be expected early in the year. "The bad winter weather and uncertainty over interest rate rises will have exacerbated the fall in lending in January, so it would be premature to draw any firm conclusions about activity levels over the next few months," he noted. A recent report by the Royal Institution of Chartered Surveyors revealed that a total of 40 per cent of industry professionals claim that rents have increased in the three months to January.