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Mortgage lending 'down in September'

By Joel Stanier

11 November2011

House made of coins Both mortgages for new house purchase and remortgages fell slightly in September, according to the Council of Mortgage Lenders (CML).

Overall, mortgages for new house purchase fell by 2% in number and 5% in value, compared with August, although it was still slightly higher than lending levels in September 2010.

Remortgages fell by 1% compared with August, with no change in value - but this was 25% higher in number and 26% higher in value than a year earlier.

The CML said that the fall in new house purchase lending was "driven entirely by a drop in home mover activity", with mortgages for home movers falling from 31,400 (worth 5.3 billion) in August to 30,100 (worth 4.9 billion) in September. But first-time buyer numbers increased - up from 18,000 (worth 2.2 billion) in August to 18,200 (also worth 2.2 billion) in September.

And affordability continued to improve for first-time buyers. The average interest on a new first-time buyer mortgage in September equated to 12.7% of the borrower's income, compared with 13.0% in August.

CML director general Paul Smee said: "Although both house purchase and remortgage loans experienced a small drop in September, the overall market to date shows a stable picture. However, the backdrop of global and domestic instability makes the future more difficult to call."

Image iStockPhotos / Fabian19

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Tags: mortgages, remortgage, house purchase, Council of Mortgage Lenders, CML, new house purchase

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