Mortgage lending in fresh decline, lenders say
UK mortgage lending remained subdued last month, figures from the Council of Mortgage Lenders (CML) suggest.
Total lending was £12bn in September, the lowest September total since 2000.
The CML's figures, which cover borrowing for house purchases as well as remortgaging, were down 1% from August and 7% lower than in September last year.
The CML data indicates lending is stagnating after picking up earlier in the spring.
"Gross lending in the third quarter of 2010 was an estimated £37.4bn, a 9% increase from the second quarter and down 4% from the third quarter of last year," said the CML's director general Michael Coogan.
"Lending volumes do not seem likely to increase substantially towards the end of the year.
"Funding pressures on lenders remain, and the practical implications of government and public spending cuts are beginning to emerge, with a resulting impact on consumer confidence," he added.
The number of new mortgages approved for house purchase, but not yet lent, has also been dropping back in recent months.
This is normally a good indicator of short-term trends and suggests that lending may decline further in the coming months.
The official Bank of England figures show that approvals fell from 60,000 in June to 55,000 in July and then 48,000 in August.
"[The] September [CML] figures are a shocker," said Brian Murphy of mortgage brokers the Mortgage Advice Bureau.
"Down on August, usually the quietest month of the year, down on last September when we were still in the grips of recession, and no sign of the traditional post summer bounce in mortgage activity which doesn't bode well for the rest of the year and early 2011."
Other evidence of an impending downturn has come in recent HM Revenue & Customs (HMRC) figures showing that in August the number of completed house sales in the UK registered their first significant fall this year.
Completions dropped to 85,000 from 90,000 the previous month.
House prices have also started to fall in recent months, as more sellers have been putting their homes on the market, outweighing the number of potential buyers willing and able to purchase a home.
Earlier this month, the Royal Institution of Chartered Surveyors (Rics) said house prices were under "downward pressure" because of this turnaround in the market.
And one of the UK's biggest mortgage lenders, the Halifax, reported recently that house prices fell by 3.6% in September alone.