The Bank said that mortgage lending during the month reached £6bn, up from £5.8bn in September. This figure was also up year-on-year from the £5.5bn recorded in October 2011.
Remortgage lending hit £3.1bn during October, £0.2bn higher than the previous month. However, these figures were well down on the £3.7 figure recorded at the same time last year.
During the month, £0.6bn was borrowed for other purposes.
Figures released by the Building Societies Association today said that gross mortgage lending by mutuals has risen dramatically in the past year. Figures jumped 29% year-on-year to £3.0bn in October. Gross lending in the first ten months of the 2012 reached £25.6 billion
Mutuals’ market share has grown from 19% of new lending to 24% in the past 12 months. The combined mutual sector approved 25,000 loans in October, almost 5,000 more than in the same period last year.
Sean Oldfield, chief executive officer at Castle Trust, said that the rise in lending was the first signs of the government’s Funding for Lending Scheme helping the market.
“Funding for Lending is starting to deliver real benefits and should help increase total lending for 2012 and into next year. Any initiative that aims to boost lending in this difficult environment should be welcomed.
“The focus of banks and building societies has to remain on creditworthy customers and the Bank of England figures showing that loan approvals for house purchases has risen by £0.2bn in October appears to bear this out.
“People applying for mortgages need to be properly advised and offered the full range of mortgage options.”
Richard Sexton, director of e.surv chartered surveyors, commented: “Life has become marginally easier for mortgage borrowers over the last two months, but at the moment it’s only a margin of small degrees.
“Rates have fallen fractionally, and it has become slightly easier to access high LTV mortgages. But it’s not yet a dramatic sea-change in conditions by any stretch of the imagination.”
Jonathan Harris, director of mortgage broker Anderson Harris, added: “While the FLS is pushing down money market rates, which is good news for all borrowers, the very best mortgage rates are still targeted at those with the biggest deposits and similar levels of equity in their homes.
“It is great news for these borrowers that they are so well catered for but those with far more modest deposits are crying out for better rates.
“The deposit is the biggest single barrier to home ownership, with first-time buyers having to delay getting onto the housing ladder until they are well into their thirties if they can’t call upon the Bank of Mum and Dad to help.
“However, we do expect the FLS to filter through to those with more modest deposits next year, resulting in lower rates at high LTVs, which will give the housing market a much-needed kickstart.”
