Mortgage lending is down 7 per cent

GROSS mortgage lending fell to just £12bn last month, which was the lowest September total for a decade, figures from the Council of Mortgage Lenders (CML) revealed yesterday.

This was 7 per cent lower on September 2009 when lending was £12.9bn and 1 per cent lower on the previous month. The September 2010 figure was still £2bn above the record low in September 2000 when mortgage lending totalled just £10bn.

In the third quarter, gross lending was estimated to be £37.4bn, 9 per cent up on the second quarter but still 4 per cent down on the third quarter of 2009.

CML director general Michael Coogan said: “Lending volumes do not seem likely to increase substantially towards the end of the year.”

He added: “Funding pressures on lenders remain, and the practical implications of government and public spending cuts are beginning to emerge, with a resulting impact on consumer confidence.”

Economists said that the weak mortgage lending figures reflected an ongoing deterioration in activity in the UK housing market and only reinforced the belief that house prices will fall further.