A report from the UK's Council of Mortgage Lenders (CML) shows that gross mortgage lending fell by 3% in October 2005 to an estimated GBP27 billion.
Although this is down from the GBP27.7 billion of lending in September, it is still one of the highest monthly lending figures on record, and 16% higher than the GBP23.2 billion of lending in the same month last year.
The report said that the figures were indicative of the continued recovery of housing transactions over the past year, as consumers took advantage of attractive mortgage rates and switched to cheaper deals.
Commenting on the figures, CML director general Michael Coogan said, The resilience of lending activity in recent months contrasts sharply with the ongoing uncertainty about household finances and consumer confidence. We believe that gross mortgage advances for 2005 will reach around £280 billion – similar to the levels seen in 2003 and 2004.
The decision by the Bank of England’s Monetary Policy Committee to hold interest rates steady in November was widely expected, and fits with market expectations that they will remain broadly flat in 2006. In this environment, we believe the housing market will stabilize around current levels.