Mortgage lending dropped again in January, industry data showed yesterday, as the market continued to plateau.
But economists think this weak spell could be at an end, with lending set to pick up across the rest of 2015.
The month saw 22,400 home movers take out mortgages, according to the Council of Mortgage Lenders (CML), down 24 per cent on the month and 17 per cent on the year.
By value, those movers borrowed £4.2bn, down 14 per cent compared with January last year.
Meanwhile, first-time buyer numbers dropped to 19,000, down 27 per cent from December and 14 per cent compared with January 2014.
Those first-time buyers borrowed £2.8bn in mortgages.
Remortgaging levels increased by 15 per cent on the month, to 25,600. However, that number is still down 12 per cent on the year, to £4.1bn.
The only segment of the market that saw significant growth was buy-to-let borrowing.
A total of 18,200 buy-to-let mortgages were given out in the month, up six per cent on the month and 12 per cent on the year. The loans totalled £2.5bn by value, up 14 per cent on the year.
“Affordability constraints remain a factor for would-be borrowers, but we are still projecting lending to pick up over the next few months,” said CML’s Paul Smee.
IHS Global Insight’s chief economist Howard Archer said: “There are signs that housing market activity may be bottoming out.”
“Latest survey evidence from the Royal Institute of Chartered Surveyors shows that buyer enquiries stabilised in February after falling for seven successive months,” he added.
The survey also showed that agreed sales rose marginally in February and January, which were the first increases since July 2014. In addition, the Bank of England reported that mortgage approvals for house purchases rose modestly for a second month running in January after being at a 17-month low in November.
Archer predicted house prices would rise by around five per cent through 2015.