Though 6% lower than December’s £20bn, it is the highest lending total for a January since 2008, driven largely by first-time buyers and remortgage activity.
Despite this, the CML said the shortage of housing for sale is acute and shows little sign of abating in the near future.
CML economist Mohammad Jamei said: “Overall mortgage lending continues to hold up pretty well, but we seem to have a twin-track market. Weakness in buy to let and home movers has been offset by an increase in first-time buyers and remortgage lending.
He added: “This shouldn’t come as much of a surprise as most government schemes have been aimed at helping boost first-time buyer numbers. As a result, there were 339,000 first-time buyers in 2016, an increase of 8% over 2015.”
However, home movers fell slightly to 360,000, marking three years in which movers have effectively remained at the same level. In some areas, such as greater London, the number of home movers fell to their lowest levels for 25 years.
Jamei said this continues to hold back the market. “A continuing acute shortage of homes being offered for sale is one aspect of a broken housing market that looks unlikely to resolve in the near term.”
The CML added that initiatives from the government’s housing white paper will not have an impact for some time.
John Eastgate, sales and marketing director of OneSavings Bank, said caution is required.
“The mortgage market has started the year on the front foot, proving its resilience against a cocktail of economic and political uncertainty. However despite the rises in both mortgage activity and house prices, it is premature to assume that all is well in the housing market,” he said.
“The Housing White Paper recognised the problem of undersupply and the affordability issues this generates. The paper has met with scepticism and even if it delivers, this will take time. In the meantime, for those who can’t buy, the private rented sector is still to see the full impact of tax and prudential changes for buy to let. We expect rents to increase as a result of these changes, making it even harder for renters to get a foot on the housing ladder. Solutions can’t come soon enough.”
John Goodall, chief executive of buy-to-let lender Landbay added that “all eyes now turn to the March Budget” where it is hoped the government will translate sentiment “into iron cast commitments”.