12% fall in gross lending in September
18 Oct 07
Gross mortgage lending fell by nearly 12% in September compared with August, to an estimated £30 billion according to new data from the Council of Mortgage Lenders. Although lending was up 2.5% on the £29.2 billion figure for September 2006, the annual increase is the lowest percentage increase in two years. The figures are not seasonally adjusted.
While lending typically falls between August and September, a 12% decline is larger than the norm of around 5%. This easing in the market is another sign of the expected consumer response to the five interest rate rises experienced since August 2006.
Commenting on the data, CML Director General Michael Coogan said:
“We have been expecting a slowdown in monthly lending levels in line with interest rate rises. In the coming months, we expect to see monthly lending levels dip below their 2006 levels for the first time this year as rate effects are exacerbated by the recent liquidity problems in the mortgage market.”
Notes to editors
1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. There are 11.8 million mortgages in the UK, with loans worth over £1.1 trillion.
2. The next gross lending press release will be on Tuesday 20 November.
3. The CML estimates of gross lending for the latest month were based on the lending figures provided by a sample of lenders that represents more than 70% of the mortgage market. The aggregate of these figures were scaled up to represent the whole market.
4. The September lending figures relate to a time before the events associated with Northern Rock and the credit market problems.
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