It was also a 21% fall from £11.5 billion in January 2009, figures from the Council of Mortgage Lenders revealed today.
A decline is typically experienced between December and January. However, this is the lowest monthly total since February 2000 (£7.9 billion) and the lowest January total since 2000 (£7.4 billion).
The CML said that the larger than average drop between December and January this year confirmed its view that house purchase activity was boosted in December by a number of borrowers trying to complete their purchase before the end of the year to take advantage of the stamp duty holiday.
CML economist Paul Samter commented: “We remain in a period of uncertainty for the housing market and economy at large. The market certainly improved over the second half of last year and started 2010 in better shape than most would have predicted twelve months ago. More recent developments have been influenced by the end of the stamp duty holiday, and are likely to foreshadow a larger than usual seasonal drop off in activity in the early part of this year.
“However, the Bank of England is likely to keep rates low which should continue to mitigate mortgage payment problems and help cushion borrowers from the worst of the recession.”
