Gross mortgage lending grew to an estimated £32.4bn in October, rising nearly 6% from £30.6bn in September 2007 and October 2006, according to the Council of Mortgage Lenders (CML).

While the increase is higher than the 3% seasonal rise that might typically be expected between September and October, the figure predominantly reflects applications and approvals from before the mortgage market became affected by wholesale funding problems.

CML expects mortgage advances to be somewhat lower over the rest of the fourth quarter, reflecting the Bank of England’s data that shows mortgage approvals have declined during the third quarter.

Michael Coogan, CML director general, said: “The next few months will be a testing time as ongoing pressures in financial markets feed through into the wider economy. Funding constraints will continue to restrict lending activity and make loans more expensive.”