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Gross lending in October down 9% on last year

Gross mortgage lending in October was an estimated £12.4bn, down 9% on last year’s £13.6bn, data from the Council of Mortgage Lenders shows.

The figure is unchanged from September but is the lowest October total since 2000, of £9.9bn.

The CML says the month-on-month annual comparison is likely to continue to decrease a little in the coming months.

This is because underlying lending volumes rose sharply in the latter part of 2009 as borrowers rushed to take advantage of the stamp duty concession before the end of the year.

In a speech today at the Council of Mortgage Lenders’ 2010 Mortgage Industry Conference and Exhibition, Matthew Wyles, chairman of the CML, says the industry is likely to end 2010 having done around £137bn gross lending, and around £9bn net lending.

Brian Murphy, head of lending at Mortgage Advice Bureau, says in a normal market there would usually be an uplift in September and October.

He says: “Borrowers are nervous, even more so since the Spending Review and confirmation of some half a million public sector job losses. This fear for their personal circumstances has certainly contributed towards the drop-off in mortgage applications.

“Fear is informing the type of mortgage people are opting for. Both purchase and remortgage applicants are erring on the side of caution in spite of historically low interest rates, preferring the safety of fixed deals over variable products.”

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JONATHAN CORNELL, HEAD OF COMMUNICATIONS, FIRST ACTION FINANCE

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