The Council of Mortgages Lenders (CML) has announced that gross lending totalled £23.3 billion in October, 8 per cent lower than September’s total of £25.4 billion and reached its lowest level since February, when it totalled £9.3 billion.
House purchase still accounted for 44 per cent of gross lending as it did in September. Remortgaging, at £10.3 billion, reached its lowest level since £9.3 billion in May.
Michael Coogan, director-general of the CML, said: “Although lending figures may fluctuate going forward we expect the slowdown to continue through the winter months.
“However interest rates are now probably at or near their peak so, despite the slowing, the overwhelming majority of existing borrowers will be able to continue to afford their mortgage payments.”
Elliot Nathan, product development manager at Charcol, said: “We should not be over-dramatic in declaring these figures as a major issue. The fact that we have been in an increasing interest rate environment for the first time in 5 years has clearly been a dominant issue for consumers.”
Nathan added: “Most commentators believe rates will come down again next year so I would expect to see lending figures improve during the course of 2005.
“We should not under-estimate the impact that mortgage regulation has had on these figures. Lenders were not at their most competitive in the run-up to regulation.”
David Bitner, head of product operations for Bradford & Bingley, said: “Lending is likely to continue to fall as we approach the traditionally quiet Christmas period however this year the market will be further impacted by mortgage regulation which has severely disrupted applications.”
