Mortgage lending outlook uncertain, says CML
Economic uncertainty makes the future of the UK mortgage market "difficult to call", a lenders' group has said.
Paul Smee, director general of the Council of Mortgage Lenders (CML), said the market for home loans was currently stable.
The number of mortgages taken out for house purchases was 48,200 in September, down 2% from the month before, the CML said.
First-time buyers needed an average deposit of 20% of a home's value.
The number of mortgages approved for house purchases was 3% higher than in September 2010.
However, mortgage lenders have suggested that the cost of loans has started to rise because banks are charging more to lend to each other.
The rising cost has resulted from banks' confidence in lending to each other being knocked by the eurozone crisis, and Mr Smee said this made the future for the mortgage market more difficult to predict.
"Although both house purchase and remortgage loans experienced a small drop in September the overall market to date shows a stable picture," said Mr Smee.
"However, the backdrop of global and domestic instability makes the future more difficult to call."
Over the third quarter of the year, the number of home loans advanced for house purchases was up 16% compared with the previous quarter at 144,200.
This was 6% lower than the number in the same period in 2010.
The number of homeowners remortgaging in the third quarter was up 23% on the same three months in 2010.
However, the latest figures show the steam might have come out of the remortgaging market, with the number of remortgaging loans approved in September down slightly on the previous month.
The number of loans taken out by first-time buyers rose slightly in September from a low base.
The level of deposit required remained unchanged compared with August, but had eased compared with a year earlier.
A report from the business group, the CBI, called for more assistance for potential first-time buyers to get on the property ladder.
It said buyers should be able to borrow from their pension pot to buy a home and there should be a system of mortgage indemnity guarantees.
These would allow a lender to claim on a mortgage indemnity if a buyer fell behind on their repayments.
The report said these should be delivered by lenders and house builders working together in the private sector, but the government could step in and share some of the risk if it could not happen on a purely commercial basis.
"We have to do more to give our young people hope in the future and support their aspirations to be homeowners," said CBI director general John Cridland.
"We could reduce the risk of higher loan-to-value mortgages if the government encouraged lenders to take out insurance against the borrower failing to meet payments.
"Owning a home has been a natural aspiration for generations of Britons since the 1950s, and should not become the preserve of a lucky few."