September saw a fall in mortgage lending, with gross advances dropping from £11 billion in August to £10 billion in September, confirming reports that the housing market is levelling out.
The latest figures released by the CML/DETR show that loans for house purchase fell in September to £6.5 billion compared with £7.5 billion in August.
However, the level of remortgaging increased significantly by almost 7% to £3.1 billion in September from £2.9 billion the previous month.
Bob Pannell, chief economist at the CML, said: “Despite the difficulties for potential first-time buyers in some areas, the prospects for buyers overall remain bright with housing affordability measures broadly stable and high levels of remortgaging underlining the competitiveness of the mortgage market.”
The average fixed rate remained at 6.30% while the average new variable rate fell from 6.13% to 6.10% in September. Accordingly, there was a small increase in the popularity of variable-rate loans in September, representing 68% of new lending while fixed-rate loans accounted for 32%.
The Building Societies Association (BSA) saw building society gross advances total £2.17 billion in September compared with £2.42 billion in August. Similarly, new mortgage lending by banks fell from £6.79 billion in August to £6.02 billion in September according to the British Banking Association (BBA).
Tim Sweeney, director general of the BBA, said: “The major banks’ secured lending was noticeably weaker in September, with gross lending lower than in any month since April. Approvals of loans for house purchase have been slowing since the summer as housing market activity has levelled out and are well below comparable periods a year earlier.”
