Mortgage lending hints at slowdown

Has the housing market peaked?

More signs that the UK's housing market may be cooling have emerged from the latest set of mortgage lending figures.

The big house price rises are probably over with but that doesn't mean to say that prices are going to fall

Jenny Scott, BBC Economics Correspondent

The data from the British Bankers' Association (BBA) has shown that demand for home loans fell last month, for the first time since March.

"The rate of growth has clearly slowed because the housing market is coming off its peak," said Peter Vipond, head of research at the BBA.

But consumer credit figures also released suggest the UK consumer is still willing to go spending in the High Street.

Mortgage lending down

"September usually sees a fall in mortgage demand, but this year saw much weaker figures than in previous years," said Mr Vipond.

The BBA said total mortgage lending by its members last month was down 17% compared with August's figure - the first decline in this figure since March.

Net lending - which allows for repayments and redemptions - grew by £3.67bn, 9% lower than August's £4.03bn rise.

"[Lending] is not declining but it is slowing down, which is in line with what we think is happening to the economy generally," Mr Vipond said.

The figures back up other recent data which suggests the housing market may be coming off the boil.

Earlier this week a study from the Royal Institution of Chartered Surveyors said house price inflation in England and Wales last month slowed to a five month low.

"This doesn't spell catastrophe for the housing market by any means, it's just consistent with a gradual slowdown," said the BBC's economics correspondent Jenny Scott about the BBA's figures.

"The big house price rises are probably over with but that doesn't mean to say that prices are going to fall."

Consumer credit

New consumer credit figures from the BBA, which includes loans and credit cards, suggested even if people are more reluctant to move home at the moment, they are still happy to go shopping.

Lending rose by £666m during September, down from August's figure of £839m, but the BBA said in seasonally adjusted terms, it was "marginally above the recent trend."

"People are continuing to go and buy new washing machines, and new cars and make purchases with the relatively cheap credit available in this country," Mr Vipond said