Mortgage lending slows

Mortgage lenders warned yesterday that the housing market would remain weak for several months as the latest figures revealed a decline in new mortgage lending in January.

The British Bankers' Association reported that lending slowed to £4.4bn last month from £5.1bn in December.

"Mortgage lending in January returned to the weaker pattern seen in the late months of 2004 after December's stronger rise," said David Dooks, the BBA's director of statistics.

The Council for Mortgage Lenders said mortgage advances totalled £17.9bn in January - a decline of 16% on the previous month.

The reason for the fall was fewer applications for money to buy new homes as opposed to remortgaging. By value, lending for new house purchases was £7.1bn in January, a 30% fall on December and the previous January.

Economists said that although January is a weak month for lending, some drop in activity had been expected but the decline could not be fully explained by seasonal factors.