There was a slight increase in mortgage lending in October, new data shows.
Gross mortgage lending increased by seven percent last month, according to new figures from the Council of Mortgage Lenders (CML). The data shows that lending totalled an estimated £18.7 billion in October, up from £17.5 billion during the previous month.
However, while October's figure was higher than September's, it was still 44 percent lower than the total amount recorded during the same month last year, when lending reached £33.4 billion.
According to Michael Coogan, director general of the CML, this highlights the current weakness in the housing and mortgage markets, which is expected to continue for some time despite large cuts in interest rates by the Bank of England.
"Consumer confidence is now being affected by the worsening economic outlook," he remarked. "However, any recovery in lending is also being held back by the continuing shortage of mortgage funding."
He urged the government to publish the delayed Crosby review when it unveils the pre-budget report. The study - by Sir James Crosby - will examine ways in which the function of the mortgage finance markets can be improved.
The CML's latest figures come as lenders are beginning to launch new tracker mortgage deals following this month's 150 basis point reduction in interest rates.
