Total gross lending reached £27.5 billion - 8% higher than September's figure of £25.4 billion, and 31% higher than last October's £21 billion.
Lending for house purchase accounted for 47% of all lending at £12.9 billion - up from £11.9 billion in September and £10.4 billion in October last year. Remortgaging accounted for 44% of lending at £12 billion, compared with £11.1 billion in September and £8.5 billion in October last year. Further advances accounted for 7% of lending at £1.8 billion, up from £1.7 billion in September and £1.5 billion in October 2002.
The CML's estimates for fixed and variable rate lending suggest a notable fall in the popularity of fixed rates during October. Fixed-rate lending fell to 34% of the total from 43% in September, but fixed rates are still much more popular than they were a year ago (22% last October). Fixed rate lending was on average more expensive in October than September, while variable rate lending was cheaper. But the average new fixed rate was still cheaper than the average new variable rate, at 4.09% compared to 4.20%.
First-time buyers accounted for only 27% of all loans for house purchase. They borrowed an average of 2.92 times their income and 89% of the property price in October, virtually the same as in September. Movers borrowed an average of 2.8 times their income and 71% of the property price.
Michael Coogan, CML Director General, commented -
"Lending levels continue to confound expectations. We expect the recent resurgence in the housing market to result in high lending levels in November too, as people try to complete their moves before Christmas.
"The November rise in interest rates means that mortgage payments have risen for people with variable rates. Although further rate rises are not guaranteed, they seem likely, and consumers should borrow with caution. With Christmas just a month away the temptation may be to spend and borrow, but we would urge consumers to tread carefully as they may well face higher mortgage costs next year."
