Demand for mortgage borrowing reached the lowest level in almost two years in February. According to the Council of Mortgage Lenders (CML), gross mortgage lending fell by 9% to £13.4 billion which is the lowest monthly estimate level since April 2013. The demand is expected to pick up due to continued low interest rates and continued growth of consumer confidence in the UK economy.

Bob Pannell, CML Chief Economist, stated, “We expect lending to improve in the coming months, as employment and earnings continue to pick up and the impact of recent stamp duty reforms start to feed through.”

There continues to be a difficult path for first time buyers to climb onto the property ladder. January data from CML revealed a strong decline in the level of lending for new home buyers. However, they are expected to be returning to the market with Rightmove, the online property lister, showing strong interest from first time buyers in available homes for sale.

George Osborne announced another program to assist first time buyers into their own homes. The Help to Buy Isa will offer a £50 tax break for every £200 a hopeful home buyer saves towards a deposit. There is a cap set at £3,000 for the tax break.

Many critics of this programme are concerned that it will push house prices higher in a market that is bearing high prices already due to shortage of supply. The programme will push more demand upon a short supply of starter homes.

Due to the current low demand for mortgage lending, home buyers, movers, and especially homeowners seeking a remortgage will find lenders are still in a competitive mode and offering very attractive low interest rates.