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Friday 20th November 2009
Mortgage lending up five per cent
Mortgage lending rose by 5% during October as the market continued to recover from its traditional summer dip, figures showed
A total of £13.5 billion was advanced during the month, up from £12.9 billion in September, but still 27% below the figure for October last year, according to the Council of Mortgage Lenders.
The group said the 5% rise during October was in line with increases seen for that month during the past decade.
Activity in the market typically picks up in September and October following a drop during August as potential buyers go on holiday.
The Council of Mortgage Lenders (CML) said the steep year-on-year falls in mortgage advances were likely to reduce during the coming months, as lending volumes had dropped sharply during the final months of 2008 and early 2009.
Paul Samter, CML economist, said: "There has been a significant change in the type of lending taking place from the start of the year.
"House purchase activity has picked up significantly. In contrast, remortgaging has dropped to decade-low levels as many borrowers have little incentive to refinance when they move onto low reversion rates, and others find themselves unable to do so due to equity constraints.
"The coming months are likely to be dominated by seasonal factors rather than underlying change."
The group said lending during October was in line with its revised forecast for total advances of £141 billion during 2009.
It expects lending to slow down during the rest of the year due to seasonal factors in the run up to Christmas.
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