Gross mortgage lending grew to an estimated £32.4 billion in October, rising nearly 6% from £30.6 billion in September and £30.6 billion in October last year, according to the Council of Mortgage Lenders.
While the increase is higher than the 3% seasonal rise that might typically be expected between September and October, the figure predominantly reflects applications and approvals from before the mortgage market became affected by wholesale funding problems.
The CML expects mortgage advances to be somewhat lower over the rest of the fourth quarter, reflecting the Bank of England’s data that shows mortgage approvals have declined during the third quarter.
Commenting on the CML gross lending figures, David Whittaker, managing director of Mortgages For Business, said: “These figures are truly dire and a reflection of the caution felt ahead of today’s spending review. The CML must now bite the bullet and admit that gross lending for the year is likely to be £125 Bn. There is no point in continuing to skirt the issue. It’s been encouraging to see some lenders re-entering the market, but so much more needs to be done if the industry is to return to any semblance of health. The government has to take responsibility, it’s about to flood the rental market having cut social housing so it needs to encourage lenders and landlords to increase activity. With lending now as low as in 2000 and house prices around double the value, it doesn’t take a Nobel mathematician to work out that we can’t continue like this.“
Paul Hunt, managing director of Phoebus Software, said: “To be honest, it’s just more of the same.”