Mortgage lending stable in October, says CML

Gross mortgage lending held steady at an estimated £20.6bn in October, according to data released by lenders on Thursday.

The amount closely matches September’s total at £20.5bn and is 5% lower than October last year.

CML senior economist Mohammad Jamei said: “Housing market sentiment is holding up well, with demand still strong. This has led to a pick up in approvals, as expected.

Mortgage costs hit an “historic low” in September with home owners benefitting from the Bank of England’s cut in the base rate to 0.25% after the referendum result.

Many lenders lowered their mortgage rates after the base rate cut, lowering the proportion of homeowner incomes spent on mortgage repayments to 17.7% compared to the 23.7% paid eight years ago.

“The more pressing issue is on the supply side, where the lack of private sellers continues to be an obstacle for would-be borrowers. For this reason, we expect lending in the months ahead to be driven more by remortgaging activity and less by house purchases. Remortgaging will be helped by competitively priced mortgage deals, which are encouraging borrowers to refinance,” said Jamei.