Fall in lending in September
Mortgage lending fell by 7% between August and September to £20.5bn, according to figures from the Council of Mortgage Lenders.
But this was still 2% higher than the same time last year, and the highest value for a September month since 2007.
The trade body estimates that mortgage lending during the third quarter was £63.6bn, 11% up on Q2 and 4% higher than the third quarter of 2015.
Henry Woodcock, principal mortgage consultant at IRESS, said the dip in lending was ‘a surprise’ following the rising trend recorded since the summer.
“There was a 7% rise in gross lending in August, but the month saw a drop in approvals which has followed through into September, effectively wiping out that gain. In spite of the fact that positive movements in the market all pointed to a continued recovery from the post-referendum and summer lull, borrower sentiment has not matched market expectations. However, I think this is just a blip,” he added.
“No doubt we’ll see lower numbers as we head into the mid-winter seasonal slow-down in activity, however the signs for October still look pretty positive.”
CML senior economist Mohammad Jamei, said remortgage activity looked set to grow against a subdued purchase market.
“Housing market sentiment continued to improve in September, after recovering in August,” Jamei added. “As a result, we expect a modest rise in approvals, though at levels lower than seen earlier this year, as the lack of properties on the market for sale and affordability constraints continue to bear down on borrowers.”