Gross mortgage lending has fallen by £4bn between August and September, but remains higher than the same period in 2006, according to the Council of Mortgage Lenders (CML).
The CML says it is normal to observe a fall in lending between August and September, but says the fall is much higher than usual, due to a combination of high interest rates and stricter lending criteria.
Lending fell 12%, to just under £30bn, in September, 2.5% higher than the £29.2bn seen a year ago; the smallest annual increase for two years.
Lending usually falls by around 5% between August and September, according to the CML, but has fallen considerably this year due to a flurry of interest rate rises and problems in the banking sector caused by the global credit crunch.
Michael Coogan, director general of the CML, comments: “We have been expecting a slowdown in monthly lending levels in line with interest rate rises. In the coming months, we expect to see monthly lending levels dip below their 2006 levels for the first time this year as rate effects are exacerbated by the recent liquidity problems in the mortgage market.”
If you would like to comment on this story, contact:
Tel: 020 7034 2682
e-mail: [email protected]
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch
To drive progress