January lending plummets 14pc
In December 2014 the figure stood at £16.6bn, while in January last year the lending total was 11% higher at £16.1bn.
Andy Knee, chief executive of LMS, said: “Looking at the year-on-year decline from January last year, we can now see the full impact of stricter lending criteria and growing FPC powers on housing demand.
“We’re championing a stable economic recovery, but it’s slightly concerning that despite the lowest-ever interest rates in the market and a flurry of new mortgage products – such as the recent, record low five-year fixes – lending been unable to maintain its momentum.
“The annual 11% fall in gross mortgage lending should serve as a reminder of the importance of balancing further checks and controls with economic recovery and homeownership aspirations.”
But Jeremy Duncombe, director of Legal & General Mortgage Club, remains optimistic.
He said: “Despite gross mortgage lending decreasing by 14% in January, we expect overall lending to pick up as 2015 progresses.
“Changes in Stamp Duty, low inflation and low interest rates will continue to create good conditions for lending both for homebuyers and remortgages.
“We expect gross mortgage lending to reach £225bn this year as more people look to move house in 2015 and with favourable market conditions acting as tailwind it’s very likely we will see uplift on the £205.6bn we saw in 2014.”
And CML chief economist Bob Pannell agrees, adding: “Although seasonal factors will continue to weigh on activity levels for a while longer, we expect the underlying picture to pick up over the coming months, in line with stronger earnings and employment, gentle interest rate trends and recent stamp duty changes.
“As we forecast at the end of last year, gross mortgage lending remains on course to reach an expected £222bn this year.”