Mortgage lending stalls as worried buyers wait it out to see if economy improves

Published 18th Mar 2011

Mortgage lending stalled during February as potential buyers continued to sit tight in the face of economic uncertainty.

A total of £9.5billion was advanced during the month, broadly in line with January's one-year low of £9.48 billion, the Council of Mortgage Lenders said.

The group recorded a seasonal pick-up in interest from buyers over the past few weeks but said demand was still weaker than a year ago.

This was despite the market being distorted early last year following the end of the stamp duty holiday.

CML chief economist Bob Pannell said: 'There is little in the latest batch of market data that would cause us to revise our market forecasts for 2011 and nothing that alters our underlying view that this is going to be a challenging year for households and the housing market.

'The housing market remains stuck in a rut and, while we do not anticipate much relief in next week’s Budget, it does present an opportunity for the chancellor to address the reform of stamp duty.

'What we have instead is the introduction of a new 5 per cent band. That is an irrelevance for the majority of home-buyers but another indication of the haphazard and arbitrary nature of this tax, where reform is long overdue.'

Source: ' ThisIsMoney '

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