Mortgage lending edges up in the third quarter

Mortgage lending was 2% higher in the third quarter compared to the same period last year despite the darkening economic environment, according to the latest figures from mortgage lenders.

Gross mortgage lending hit £38.6bn in the three months to September, up on the £37.9bn lent in the same period last year, and 15% up on the amount lent in the second quarter of 2010.

The figures, which show September data for the first time, say £12.9bn of loans were issued in that month, a slight drop on the £13.1bn lent in August, but 4% up on September last year.

CML chief economist Bob Pannell said: “Both house purchase and remortgage lending appear to have fared well in September, but this is against the backdrop of subdued levels of activity.

“However, short-term economic prospects for the UK are not favourable. The housing market is very sensitive to wider household confidence, and this seems likely to weaken over the coming months in response to the latest spike in consumer prices and headline unemployment figures.”

Paul Hunt, managing director of Phoebus Software said: “Despite the modest fall in lending seen in September, the quarterly and annual improvement shows how resilient the market has been to the economic challenges it faces. There are plenty more economic hurdles to jump before we will see a significant and sustained recovery in lending.