UK mortgage lending maintains quarterly growth despite drop in September

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Mortgage lending in the UK rose by 13% between the second and third quarters of 2012, new figures showed today.

The Council of Mortgage Lenders (CML) said that 146,500 mortgages were advanced for house purchases between July and September, although there were marked fluctuations from month to month.

In particular, September saw much lower house purchase lending in comparison to August, although remortgaging rose over the month. The drop in September interrupted the underlying upward trend in house purchase lending that had been seen since the end of last year.

Lending to first-time buyers declined by 14% compared to August and by 3.2% compared to September last year.

CML director general Paul Smee noted that the overall slowdown in lending seen in September followed a particularly strong August and the quarterly figures suggest that the underlying picture is more positive.

Moreover, there is reason to believe that growth will return in the coming months after the Bank of England pointed to an increase in house purchase approvals in September. Lending may also pick up as a result of policy measures such as the Funding for Lending Scheme from the Bank of England and the Treasury, which was launched recently in an effort to support activity in the housing market by ensuring the availability of credit and lowering its cost.

Smee added, however, that it may take some time before a boost from the Funding for Lending scheme is reflected in house purchase completions.

The Council of Mortgage Lenders represents banks, building societies and other lenders who together account for around 95% of all residential mortgage lending in the UK.

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