UK Mortgage Lending Rises in October – CML

According to the latest report published by the Council of Mortgage Lenders (CML) on Thursday, November 19th 2009, gross mortgage lending in October in the United Kingdom increased by 5%. However, the organisation claimed that the rise should be attributed to seasonal factors rather than to any significant improvements in the British mortgage sector.
The 5% rise in mortgage lending in October brought it to £13.5 billion, which is £0.6 billion up from £12.9 billion worth of mortgage lending registered in September 2009. The Council of Mortgage Lenders also highlighted that the year-on-year difference in mortgage lending amounted to £5 billion, or 27%. Let us remind that in October 2008 the CML reported that gross mortgage lending reached £18.5 billion.
According to the Council of Mortgage Lenders, the average monthly rise in gross mortgage lending between September and October has amounted to 5% for the past 10 years, which fact suggests that the current rise is not more than a seasonal trend.
The CML also claimed that the level of gross mortgage lending registered in October remains in line with the organisation’s forecast for annual mortgage lending. Let us remind that the Council of Mortgage Lenders expects total mortgage lending for 2009 to amount to £141 billion.
Speaking on behalf of the Council of Mortgage Lenders, Mr. Paul Samter, organisation’s economist, said that a slowdown in mortgage lending is expected in the coming months. He added that it is currently problematic to assess changes in the UK mortgage market and that the CML does not expect any significant improvements on the British mortgage scene in 2010.
He explained that the mortgage market might see only slight improvements next year because the UK economy as a whole will recover slowly.
According to Mr. Samter the coming decline in mortgage lending in the UK should not be attributed to a downturn either; instead, a decrease in mortgage activity in November and December has always been a seasonal trend. He, however, highlighted, that mortgage lending activity is expected to be weaker than demand from house buyers.