This was 13% lower than in July and just 3% higher than in August 2003. This is in contrast to last month, when lending was 3% up on the previous month and 13% up on the previous year.
In marked contrast to last month, when lending was driven by a new £14.6 billion monthly record for house purchase loans, house purchase lending in August fell back by 18% to £11.9 billion.
This was exactly the same as in August last year, and was the first time since August last year that lending for house purchase did not show a year-on-year increase. Lending for house purchase accounted for 48% of gross lending in August, down from 51% in July and 49% in August last year.
The value of remortgaging also fell back in August, but less dramatically, resulting in an increase in the proportion of lending for which it accounted. Remortgaging in August totalled £10.4 billion, 6% lower than in July but still 7% higher than in August last year.
Remortgaging accounted for 42% of lending, compared with 39% in July and 40% in August last year.
The number of loans for house purchase fell by 20% in August to 104,000, down from 130,000 in July and 116,000 in August last year. First-time buyers accounted for 28% of these, the same proportion as last month. The typical first-time buyer borrowed 87% of the value of their property.
There was a further decline in the proportion of borrowers choosing variable-rate loans. The proportion choosing variable rates dropped to 56% in August from 60% in July, but above the 51% in August last year.
At 5.39%, the average new variable rate was just three basis points below the average new fixed rate at 5.42%, and was 13 basis points higher than the average new capped rate at 5.26%. Unsurprisingly, given the relative pricing, capped rates showed a surge from 2% of all lending in July to 6% in August.
CML Director General Michael Coogan says: “This month's figures seem to suggest that the slowdown recorded by estate agents and reflected in recent approvals figures is beginning to make its way through the lending system. But no-one should be surprised if the lending data for the next few months shows a bumpy pattern rather than a smooth slowdown.
“What does seem clear, taking all the market data together, is that the market is slowing down. While we need to remain alert to the possibility that there could be a bounce back next year if consumers become complacent about the future direction of interest rates, all the
evidence so far points to the likelihood of an orderly soft landing, in line with our expectations.”