Higher borrowing costs contributed to a decline in gross lending in September, with the bulk of the impact being felt on lending for house purchase rather than re-mortgaging, according to the Council of Mortgage Lenders (CML).

September’s lending total of £30.6bn was lower than August’s £34bn, but higher than a year ago (£29.2bn in September 2006). At £12.7bn, house purchase borrowing was lower than in both the preceding month (£16.2bn) and in September 2006 (£13.9bn).

But re-mortgaging and other lending remained buoyant in September. At £11.1bn, re-mortgaging was higher than in August (£11bn) and in September 2006 (£10bn).

The average mortgage rate in September was 6.02%, compared with 5.91% in August. As a result, affordability worsened for first-time buyers and movers. Mortgage interest payments consumed 20.4% of income for first-time buyers and 17.5% for movers. Borrowing by both groups declined in September. There were 28,400 loans to first-time buyers, worth £3.8bn (compared with 34,800, worth £4.7bn, in August). And movers took out 52,400 loans, worth £8.9bn (compared with 68,000, worth £11.5bn, in August).