October saw a 5 per cent rise in mortgage lending compared with September, according to figures from the Council of Mortgage Lenders (CML). Nevertheless, the figure of ?13.5 billion in gross mortgage lending was 27 per cent lower than October last year.
The monthly rise was a typical seasonal fluctuation according to the lenders group but there has been a change in the type of lending, with remortgaging is at ?decade-low levels?. The BBC also reported that the Bank of England?s Trends in Lending report showed that there were more mortgage approvals in October than in September.
CML economist Paul Samter said: ?Recent weeks have provided some reasons to be more cheerful about the state of the UK economy and housing market. We are now likely out of recession.?
However, Mr Samter anticipated a dip in activity over the festive season. He indicated that the CML remained unconvinced that housing and mortgage activity could improve much, with only a modest increase likely over the next year or so.
The CML noted a change in the type of lending, with remortgaging down but house buying activity significantly up since the beginning of the year. The Council felt that borrowers had little incentive to remortgage, with standard variable rates comparatively attractive and less problematical.
The low interest rates had also helped borrowers avoid falling into arrears, with the numbers doing so less than expected.
Andrew Montlake of mortgage broker Coreco felt that buyers were looking to get into the market before prices went too high again. He said: ?There is clearly an appetite to buy before prices become further out of reach. The estate agents we deal with are reporting that there has not been the usual dip in demand at this time of the year, which is doubtless a reflection of this.?
