CML reports 10% drop in monthly mortgage lending

The Council of Mortgage Lenders (CML) warns that September’s figures show there is little demand for house sales and the number of remortgages is also down leading to subdued activity in the housing market.

The CML says that gross mortgage lending was down by ten per cent on the previous month and 15 per cent lower than a year ago.

Gross mortgage lending was £11.6 billion in September, down from £12.9 billion in August.

However, the quarterly figures were up by £2.8 billion in the three months to the end of September to £37.3 billion compared to £34.5 billion in the quarter ending in June. However, it was five per cent down on the same period in 2011.

Hugh Wade-Jones, director of mortgage broker Enness Private Clients, said: "It's a depressing double act - the housing market is still soporific and mortgage lending is going back into hibernation.

"Total lending in September fell to the lowest level since April's atrociously low numbers.”

The data suggests that the Bank of England’s Funding for Lending Scheme (FLS) has had little impact on the property market and that despite the greater availability of mortgages, consumers are not wanting to move home or are unable to get accepted for a mortgage.

As well as a lack of demand for mortgages, the data suggests that compared to a year ago, the number of people looking to remortgage has also fallen.

This suggests that homeowners are sticking to relatively low variable mortgage rates with their existing lenders rather than remortgaging.

CML chief economist Bob Pannell said: “House purchase demand failed to lift significantly in the third quarter, despite much better mortgage availability. Remortgage activity continued to languish, in contrast to relatively strong levels a year ago."

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