Towards the back end of last year, there was a significant increase in the amount of activity within the housing and home owner loan markets, with December hitting a particular high point with a large proportion of first time buyers entering the market.

The main reason for this boost in purchases and loan applications was largely due to the imminent end to the Government’s stamp duty holiday at the end of December and many home buyers, particularly first time buyers of properties valued below £175,000, were rushing to save themselves this additional cost on top of their home owner  loan or mortgage.

However, the latest figures from the Council of Mortgage Lenders (CML) have revealed many experts worst fears, which has been that the boost in sales and loan applications prior to Christmas has led to a dramatic fall in home owner loan applications during January.

According to the figures from the CML, the amount of new lending on home owner loans fell by 32 per cent in January alone, from December, to reach the lowest level of activity since February 2000.

The gross amount of new home owner loans in December was £13.4 billion, but this had fallen to just £9.1 billion by the end of January.

Although this shows a significant drop in new loan activity, this has been largely due to the stamp duty holiday rush and the usual seasonal decrease in loan activity and many experts have been expecting these figures and do not see reason for undue concern.

Paul Samter at the CML said “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.”