Mortgage lending on the increase

A report on mortgage lending trends by the Bank of England (BoE), published in October 2009, revealed that total net mortgage lending rose by +£1bn in August after being down £0.2bn in July, with the annual rate of lending growth increasing for the first time since September 2007.

The report stated that gross mortgage lending for house purchases maintained its upward trend in September despite the remortgaging market continuing to stagnate.

Michael Coogan, CML’s director general, said: "As we surmised when we published our September gross lending data, the new report confirms that September saw a continuation of the two-speed mortgage market, with lending for house purchase continuing to increase but remortgaging remaining weak.

"But, also as we have highlighted, funding conditions remain challenging, despite the encouraging signs of a slight thaw in wholesale funding markets. This report very much confirms our own assessment of market prospects - the most likely scenario is a slow and long-drawn out recovery."

Major lenders however stated in the report that mortgage credit availability had fallen during Q3 2009 but was expected to increase in the next quarter with the demand for house purchases to rise further.