Gross lending up £1bn in October
Lending secured on dwellings rose £1 billion in October, compared to a £0.2 billion increase in September and above the previous six-month average of £0.6 billion, Bank of England figures show.
The annual growth rate remained at 0.8% and the three-month annualised growth rate increased 0.5% to 0.9%.
At 47,185, the October number of loans approved for house purchase was broadly similar to the September figure of 47,369 and lower than the previous six-month average of 48,503.
Approvals for remortgaging of 29,275 were also little changed on Septemberís 29,019 but were higher than the previous six-month average of 27,248. Approvals for other purposes at 23,469 were similar to Septemberís 23,409 and lower than the previous six-month average of 24,433.
Despite the rise in October, gross mortgage lending by mutuals fell 10% over the month from the £2.2 billion lent in September to £2 billion, said the Building Societiesí Association.
Mortgage approvals by mutuals also fell by 8% in October to £1.8 billion from £1.9 billion in September.
Adrian Coles, director general of the BSA, said the fall was in line with weakening lending activity across the market.
He said: ďAlthough lending by mutuals fell in October, gross lending remains similar to the average over the preceding three months. Reports of falling house prices and government spending cuts have lowered consumer confidence which has put further downward pressure on demand for mortgages.
ďAn encouraging trend in recent quarters, however, has been the growth in mortgage approvals at mutuals and this may lead to some recovery in mutualsí market share over the next few months.Ē
Brian Murphy, head of lending at independent mortgage broker, Mortgage Advice Bureau, added: "House purchases are very flat at present, probably the flattest they have been since the darkest days of the recession.
"Until people are more confident about their personal circumstances and finances, there is unlikely to be much change on this front and the property market will continue to stagnate.
"Product numbers now are the highest since the economic downturn began but the vast majority of loans are at 75% loan to value or below. There is far less choice between 75% LTV and 90% LTV, which is holding the market back.
"The slight uptick in remortgages reflects how borrowers are increasingly beginning to move off SVRs, which can be above 4%, onto longer term fixes that are often far more competitive."
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