Mortgage lending slumps to a 10-year low.

Mortgage lending slumps to a 10-year low.

12:29 PM, 12th November 2010, About 14 years ago

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Mortgage lending by Britain’s banks and building societies hit a 10-year low last month – and the outlook is unlikely to improve.

Gross mortgage lending totalled an estimated £12 billion in September, down 1% from £12.1 billion in August and down 7% from September 2009 (£12.9 billion), said the Council of Mortgage Lenders (CML).

This is the lowest September total since 2000 (£10 billion).

Gross lending in the third quarter of 2010 was an estimated £37.4 billion, a 9% increase from the second quarter and down 4% from the third quarter of last year.

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

“Despite the pressures on government finances, today’s comprehensive spending review is no time to make further cuts in state support for borrowers in difficulty.

Buy to let applications total 13% of broker’s business

“A concerted effort by borrowers, lenders, the government and money advice agencies has helped to keep mortgage arrears and possessions in check during the current economic downturn.

“These support measures help contain the wider costs of homelessness, and deliver wider benefits to the government. Now is not the time to weaken the existing safety net.”

The CML is a voice for banks, building societies, and other lenders who advance around 94% of all residential mortgage lending in the UK.

The lending statistics are based on actual loans advanced to borrowers.

Meanwhile, property letting and sales chain Countrywide reported buy to let mortgage applications made up 13% of September’s business through the firm’s intermediary network.

Countrywide chief executive Grenville Turner said: “Overall mortgage applications rose 1% in September, which demonstrates that the purchase mortgage market is still active with a new wave of buyers entering the market.

“While the third quarter is a traditionally quieter period for the market, mortgage applications are broadly in line with overall house sales.”

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