Only 50,300 mortgages were taken out by house buyers across the UK in January, the lowest number since the Council of Mortgage Lenders (CML) started its records in 2002. The figure represented a 19 per cent fall from 62,000 in December, and was 34 per cent lower than January last year. The value of mortgages for house purchase declined to 7.8 billion, a 17 per cent fall from 9.4bn in December and 31 per cent from 11.2bn from January 2007.
However, the number of remortgages in January stood at 85,000, a 43 per cent increase from December.
The figures also show that the average first-time buyer had to borrow 3.32 times their income, slightly up from 3.31 in January last year.
Michael Coogan, CML director-general, said: "The wholesale funding markets remain largely closed and mortgage funding still remains constrained.
"This is now having a discernible impact on lending criteria and the ability of first-time buyers to get into the market."
The CML found that first-time buyers were having to take out mortgages for 88 per cent of the property's value, while home movers typically borrowed 70 per cent.
The figures were taken as evidence that first-timers are struggling to save for a deposit, which would enable them to take out a smaller, less expensive mortgage.
Because of increasing house prices in recent years, only 39 per cent of first-time buyers in the UK avoided stamp duty in January. The numbers caught by the tax have increased substantially in the past two years. As recently as January 2006, 53 per cent of first-time buyers escaped stamp duty.
Coogan added: "The Budget presents a perfect opportunity for the government to do what it can to help first-time buyers by raising the stamp duty threshold."
Coogan said he was unconvinced that a proposed kitemark "gold standard" for mortgage securities – a possible proposal in today's Budget – was the solution to the problems in the wholesale funding market.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS), said: "The CML data provides clear evidence that the credit crunch is now having a meaningful impact on the availability of finance for home purchases.
"First-time buyers are very much under the cosh in this more hostile environment. While any increase in the stamp duty threshold in today's Budget would provide borrowers with some assistance, the scaling back of lending activity is likely to limit the extent of any benefit. "
The UK housing market survey for February, published yesterday by RICS, painted a more positive picture for Scotland than the rest of the UK.
The net balance of surveyors reporting price rises north of the Border surged from 7 per cent in January to 25 per cent. RICS said that was a significant jump in the current economic climate, indicating that Scotland still remained the most buoyant market in the UK.