Mortgage lending has declined for the second consecutive month as a result of the slowing housing market, says the Council of Mortgage Lenders.
The monthly CML survey, posted a 4% drop in gross lending last month, while at £25.4bn, gross lending has seen its first year-on-year drop since October 2000, by 2%.
Lending for house purchases was down £1.6bn from August, at £11.2bn.
About 44% of total lending was for house purchases, down from 47% recorded a year ago, the CML says.
Total lending figures continued to climb to a record £80.8bn for the whole third quarter, the CML adds. Mortgage loans totalling £38.6bn through the quarter were unchanged on the previous three-month period.
Both sets of quarterly figures were buoyed by the record month of July.
The number of m mortgage loans approved fell below the 100,000 mark for the first time since February.
First-time buyers represented about 29% of all loans for house purchase, or less than 29,000, compared with 32,000 at the same time last year.
Remortgaging meanwhile, increased to a monthly record of £11.5bn in September compared with £11.0bn the previous month.
CML expects this rise to continue reflecting a "strong appetite" by consumers for sniffing out good-value deals.
Fixed and capped-rate mortgages accounted for a combined 43% of new lending in September.
Michael Coogan, CML director general, says: "All the latest lending data reinforces evidence that the expected slowdown in the housing market is materialising."
"Remortgaging is holding up, but house purchase lending is slowing markedly. Data from other surveys corroborates the picture of an exceptional recent market that is now gently losing steam."
Coogan adds that while the Bank of England feels that interest rates may not yet have peaked, unless lending increases, ‘it looks as if inflationary pressure arising from the housing market itself has now dramatically reduced’.
Meanwhile, last month's figures from the Major British Banking Groups, shows total sterling lending to the UK private sector increased by £12.4bn to £1,048.5bn.
This was weaker than August’s rise of £14.2bn but stronger than the average rise over the previous six months of £11.8bn.
Mortgage lending increased by £5.4bn and while this is £1.0bn higher than August, it largely reflected intra-company accounting within one group, and not fundamental change in demand, the BBA says.
Lending in September to real estate increased by £2bn representing the strongest figure for many years.
Overall lending to financial companies decreased by £0.5bn with strong lending to investment and unit trusts (+£3.9bn) being offset by an underlying decline in lending to other financial intermediaries (-£2.5bn) and securities dealers (-£1.4bn).IFAonline
The majority of financial advisers (85%) believe the number of self-invested personal pension (SIPP) providers will continue to fall in the coming year, according to Dentons Pension Management research.
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