Mortgage lending up 5% in October

New figures released today by the Council of Mortgage Lenders (CML) show that gross mortgage lending reached an estimated £13.5 billion in October, a 5% rise from £12.9 billion in September but down 27% on £18.5 billion in October 2008.

According to the CML, this is “typical seasonal activity between September and October”, as the average monthly rise over the last decade has been 5%. The CML report predicts that the annual comparison should start to improve in the coming months as underlying lending volumes dropped sharply in the latter part of 2008 and early 2009.

The report also states that the October outcome is in line with the CML’s updated forecast for gross lending of around £141 billion for 2009 as a whole with some seasonal slowdown expected over the remainder of this year.

ICML economist Paul Samter said:

“There has been a significant change in the type of lending taking place from the start of the year. House purchase activity has picked up significantly. In 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. The coming months are likely to be dominated by seasonal factors rather than underlying change.”