Mortgage lending falls

Mortgage lending traditionally falls during the autumn

Loan chiefs, reporting a slide in demand for mortgages last month, have said the after affects of the terror attacks on the US are not to blame.

Mortgage lending by banks and building societies fell to £14.3bn last month, from a record £16.5bn in August, the Council of Mortgage Lenders said.

But the council said that the fall reflected a typical autumn lending drop, rather than a post-attack slide in consumer confidence.

"These figures are based on mortgage completions, so it is too early to detect any impact the events of 11 September may have had on the housing market," the CML said.

A separate report, from the British Bankers' Association (BBA), also revealed a fall in lending growth, to £3.67bn last month compared with £4.03bn in August.

The September figure is nonetheless higher than a recent monthly average of £3.25bn.

Commercial property

The mortgage reports came as a separate survey, by the Royal Institution of Chartered Surveyors (RICS), showed a sharp fall in demand for UK commercial property.

One in three chartered surveyors suffered a drop in business as the weak economic outlook has made companies careful about launching new ventures, the RICS said.

Ever more landlords are being forced to increase incentives to attract tenants as demand for both offices and shops wanes, the report said.

"We are in a downturn and many believe this was inevitable after such a sustained period of growth," RICS commercial faculty chairman, Graham Chase, said.

Surveyors' confidence has slumped to its lowest level for at least seven years, in part due to the 11 September attacks, the report said.

"There are some similarities with the early 1990s, insofar as the south is showing once again that gains made during times of growth mean greater heights from which to fall," Mr Chase said.

Disconcerting

Industry group British Chamber of Commerce said the RICS findings highlighted the need for further cuts in interest rates to support the UK economy.

"It is worrying what we are seeing," BCC spokesman Andrew Parkinson said.

"What we have predicted for some months now and what we have been reporting is a severe manufacturing downturn.

"That downturn is now beginning to pull the tails of the service sector."

The RICS report repeated findings that manufacturing is suffering its worst recession since 1991, and that the demise of e-commerce and hi-tech ventures have also affected the commercial property market.