House market slowing, lenders say

The CML says the market is "losing steam"

Mortgage lending fell again last month, the Council of Mortgage Lenders (CML) has said, in a further sign that the UK housing market is slowing.

Some £25.4bn was lent last month, down 4% on August and the second month in a row the figure has fallen, the CML said

The figure was down 2% on last year and the first year-on-year fall since 2000.

"All the latest lending data reinforces evidence that the expected slowdown in the housing market is materialising," the CML said.

Further evidence of a cooling housing market came from housebuilder Taylor Woodrow on Wednesday.

Remortgaging is holding up, but house purchase lending is slowing markedly Michael Coogan, CML director general

The firm said sales could be 6% lower than previously hoped because potential buyers were taking more time to make a decision on properties.

'Losing momentum'

The CML figures showed that, by number, loans for house purchase showed a marked fall in September, dipping below the 100,000 mark for the first time since the traditionally quiet month of February.

However, despite the falls in lending over the past two months, figures for the third quarter as a whole continued to show a record value of £80.8bn for total lending, the CML said.

First-time buyers continued to account for about 29% of all loans for house purchase.

But in such a quiet month as September this equated to fewer than 29,000 first-time buyer loans, compared with nearly 31,000 in August and nearly 32,000 last September, the CML said.

"Remortgaging is holding up, but house purchase lending is slowing markedly," said CML director general Michael Coogan.

"Data from other surveys corroborates the picture of an exceptional recent market that is now gently losing steam.

"At the same time, the Bank of England has been emphasising that interest rates may not yet have peaked."

Mr Coogan added: "Unless there is a marked change in the direction of lending and house price data, which seems unlikely on the basis of recent evidence, it looks as if inflationary pressure arising from the housing market itself has now dramatically reduced."