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Mortgage lending drops markedly in January

The rush to beat the stamp duty holiday deadline in December has been cited as a major reason behind the marked fall in mortgage lending recorded at the start of the year.

According to new figures released by the British Bankers Association (BBA), lenders approved some 35,000 new mortgages over the course of the first month of the new decade.

This compares unfavourably with the figure of 46,000 recorded for December 2009, while January's total lending amount of 8 billion also represented the lowest level of mortgage borrowing seen in the UK for almost nine years.

However, the BBA claimed that, rather than falling confidence in the housing market, this drop can be attributed to the fact that many people rushed through their mortgages at the end of 2009 so as to take advantage of the government's stamp duty holiday.

Commenting on the significance of the stamp duty changes, BBA director of statistics David Dooks said: "There was a natural reaction in the January figures and the bad weather further suppressed market activity."

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Published: 24/02/2010

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