Mortgage lending falls

Mortgage lending fell by 13% last month as the traditional autumn slump in house buying took some of the buoyancy out of the market, figures showed today.

The Council of Mortgage Lenders (CML) said banks and building societies lent a total of ?14.3bn in September, well down on August's record sum of ?16.5bn.

But the group said the drop was largely due to seasonal factors, and added that, because the figures were based on completions, it was too early to detect any impact on the housing market from the US terrorist attacks.

The British Bankers' Association reported a similar slowdown in lending among its members, with lending last month increasing by ?3.67bn, once redemptions and repayments had been taken into account, compared to ?4.03bn the previous month.

A spokesman for the group said despite the slight dip, overall growth in lending was still strong, and above the recent trend of a ?3.25bn monthly increase.

The BBA said consumer credit, which includes personal loans, increased by ?849m during September, up on August's figure of ?789m. The group said the rise, which was still slightly below the trend level of ?890m, could be due to people borrowing to buy cars at the September registration.

Credit card borrowing also picked up last month, rising by ?172m - its largest rise for four months.

The CML said the average mortgage taken out by a first-time buyer during September was ?66,585, down from ?70,168 in August, representing 77% of the property's value and 2.36 times their income.

The Building Societies Association reported that lending by its members, once redemptions and repayments had been taken into account, increased by ?315m during September, compared to ?396m in August.

But deposits made into building society accounts were up, rising to ?656m, from ?543m the previous month.

Adrian Coles, director-general of the Building Societies Association, said: "September's net receipts for building societies are up for the second month running, with a significant increase of 21% on August's figures."

He added that this may reflected the current uncertainty over investing in the stock market.