Gross mortgage lending by banks, building societies and specialist lenders fell by 6% in August 2007 (£32.2bn) compared with July 2007 (£34.1bn), according to the Council of Mortgage Lenders (CML).

This month, a number of lenders have withdrawn certain lending products, amended their lending criteria, or re-priced their deals. However, not all the re-pricing has had the effect of increasing the cost to the consumer as some lenders have reduced the rates on their fixed rate mortgage products. Initial indications suggest that September’s lending volumes remain robust.

Michael Coogan, CML director general, said: “Lending fell slightly in August, but was still at very high levels. We see no obvious decline in consumer demand, although some decrease in the supply of lending is being experienced in the short-term as a result of the problems lenders face in raising wholesale funding.

“The events of the past week have shown us how very quickly situations can change. Even after the good news on inflation falling back to 1.8%, the Fed’s rate cut and the Bank of England’s support for three-month funding, it is not a given that the Bank will follow suit on cutting rates. It makes sense for consumers to continue to plan for rates at or close to their current levels for the foreseeable future; we are not out of the woods yet.”