The value of these loans also plummeted to £10.5bn, falling 8% on a monthly basis and 11% annually.
Of these loans, borrowing among first-time buyers and homemovers fell both annually and monthly to reach £4.5bn and £5.9bn, respectively. The value of loans to first-time buyers is now 8% lower than September and 2% down on a year earlier, while lending to homemovers has dropped by a significant 18% since the same time last year and 9% a month earlier.
Remortgage activity continued to be strong, with loans totalling £6.1bn, 11% higher than September and up 7% on a year earlier. This came to 34,700 loans, up 10% month-on-month and 5% compared to a year ago.
Peter Williams, executive director of trade body the Intermediary Mortgage Lenders Association, said: “October’s lending figures are indicative of a market that is still finding its feet after a tumultuous year.
“The remortgage market has taken off this year with the total value of such loans now at their highest rate since the beginning of 2009, as consumers continue to take advantage of the historically low interest rates. However, with swap rates rising, now is probably a good time to remortgage as the best deals might not be around for too much longer.”
In the buy-to-let market, loans to landlords recovered slightly on September, with both the value and number of loans rising to reach £3bn and 18,600, respectively. However, lending still failed to reach levels recorded during the same month in 2015, as the value of buy-to-let loans was down 21% with the number of deals down 25%.
Paul Smee, director general of the CML, added: “Buy-to-let house purchase lending remains weak following the change to Stamp Duty on second properties in April. With lenders are now tightening affordability criteria ahead of the Prudential Regulation Authority’s stress tests and the forthcoming tax relief changes next year, these lower volumes are likely to be the ‘new normal’.”