UK gross mortgage lending was 5% lower in October than the same month last year, figures from the Council of Mortgage Lenders show.
In October there were £20.6bn of lending, down from £21.8bn last year but broadly flat with September’s total of £20.5bn.
Mohammad Jamei, CML senior economist said: “Housing market sentiment is holding up well, with demand still strong. This has led to a pick up in approvals, as expected.
“The more pressing issue is on the supply side, where the lack of private sellers continues to be an obstacle for would-be borrowers.
“For this reason, we expect lending in the months ahead to be driven more by remortgaging activity and less by house purchases. Remortgaging will be helped by competitively priced mortgage deals, which are encouraging borrowers to refinance.”
Paul Smith, chief executive of haart estate agents, said: “Despite mortgages rates reaching historic lows since the Bank of England’s decision to cut base rates in August, lending remains subdued this month.
“This comes as transaction rates continue to suffer on the month and on the year, due to a lack of housing stock coming onto the market, as sellers and housebuilders continue to move with caution in the volatile market and unpredictable socioeconomic environment.
“Lower levels of lending will be also be an outcome of what the Redfern Review described yesterday as historic lows for home ownership in the UK.
“We need to see the new government following in Thatcher’s footsteps, with a steadfast commitment to home ownership and concrete support for first time buyers.
“This is about much more than housebuilding, and we need to give Generation Rent better access to mortgages and greater support for those saving for deposits. Unless more is done, young people will become permanently trapped in an expensive rental market.”