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Seasonal rise in mortgage lending

Seasonal rise in mortgage lending

Category: Mortgages

Updated: 19/11/2009
First Published: 19/11/2009

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 It is now over 6 months old so the content may be out of date.

The mortgage lending market continued to show signs of improvement in October, and will continue to grow albeit modestly next year, according to the Council of Mortgage Lenders (CML).

Gross mortgage lending for the month was an estimated £13.5 billion, a 5% rise from £12.9 billion in September but down by 27% on October last year.

The CML said the rise was typical of the seasonal activity normally seen between September and October, with the average monthly rise in this period over the last decade being 5%.

It also expects the annual comparison to start to improve in the coming months as underlying lending volumes dropped sharply in the latter part of last year and early 2009.

Despite this, some seasonal slowdown has been predicted for the remainder of the year. CML economist, Paul Samter, added that he expected the coming months to be dominated by seasonal factors rather than underlying change.

A significant change in the type of lending that had taken place since the start of 2009 had also been noted.

"House purchase activity has picked up significantly," he added. "By 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."

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