Gross mortgage lending in the UK across the residential market in January 2019 was £21.6bn, some 1.5% lower than in the same month in 2018, figures from UK Finance revealed.

However, the number of mortgages approved by the main high street banks in January 2019 was 0.3% higher than in January last year. Mortgage approvals for home purchase were 1.5% higher, though remortgage approvals were 3.1% lower, while approvals for other secured borrowing were 6.8% higher.

The drop in remortgage levels may come as a surprise, as the market experienced several months of strong growth in remortgaging earlier in 2018, as customers took advantage of low interest rates, a competitive mortgage market and sought to obtain attractive deals.

The £10.8bn of credit card spending in January 2019 was 4.4% higher than in the same month a year earlier, while the outstanding level of credit card borrowing also grew by 4.4% in the twelve months to January.

Borrowing through personal loans and overdrafts also saw an increase in the year to January, rising by 4.7%.

Personal deposits in total grew by 0.4% in the year to January 2019, which, according to UK Finance, suggested that the recent rise in real wages has not yet translated into higher levels of savings. Deposits held in instant access accounts were 2.4% higher than last December, “reflecting the preference amongst consumers to keep cash close to hand amid ongoing economic uncertainty”.

Commenting on the data, Foundation Home Loans marketing director Jeff Knight said: “As we edge towards March 29, some buyers have pulled the brakes on the purchase process – though given continued interest from first-time buyers, it’s not quite been enough to halt activity entirely. In fact, specialist cases have increased their share of the market, with lenders able to develop more bespoke offerings that are better suited to this climate.

“However, those a little more concerned about moving in the short-term may opt to re-mortgage, locking in low rates to help manage the chances of an interest rate rise later this year.”

Landbay CEO John Goodall added: “This dip in lending is unquestionably linked to homeowners and landlords putting off the decision to put their property on the market. This ‘wait and see’ approach, entirely understandable in the current economic climate, is exacerbating the chronic undersupply of available housing.

“The current stalemate means that it falls to landlords, both private and institutional, to pick up the pieces and provide quality housing for those who would be buyers in more normal economic conditions.”

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