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Mortgage lending shows mixed picture

Mortgage lending shows mixed picture

Category: Mortgages

Updated: 20/10/2011
First Published: 20/10/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Mortgage lending fell back slightly in September but has risen over the last 12 months, figures from the Council of Mortgage Lenders (CML) show.

Gross mortgage lending in the UK totalled an estimated £12.9 billion in September, a 2% fall from the £13.1 billion lent in August but 4% higher than 12 months previously, when lending was £12.4 billion.

Lending has also increased markedly over the last quarter, compared with the previous three months.

Gross lending for the third quarter of 2011 was an estimated £38.6 billion, a 15% increase from the second quarter of this year (£33.5 billion) and a 2% increase from the third quarter of 2010 (£37.9 billion).

"Both house purchase and remortgage lending appear to have fared well in September, but this is against the backdrop of subdued levels of activity," said chief economist of the CML, Bob Pannell.

"However, short-term economic prospects for the UK are not favourable.

"The housing market is very sensitive to wider household confidence, and this seems likely to weaken over the coming months in response to the latest spike in consumer prices and headline unemployment figures."

Figures from the CML's market commentary show seasonally adjusted house purchase approvals, at 52,410, were 6% higher than in July.

This was the first time in more than a year that approvals were above 50,000 and the highest such figure since December 2009.

Meanwhile, seasonally adjusted remortgage approvals, at nearly 35,000, were more than 9% higher than in July and the best performance since February.

Remortgage activity is also faring relatively well, with activity a third higher in August than a year ago.

The CML said that borrowers are attracted by the modest progressive easing of lending criteria and competitive deals.

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