The amount borrowed for house purchase by home-owners fell by 8 per cent in the month to October and 11 per cent annually, according to statistics from the Council of Mortgage Lenders.
In October, homebuyers borrowed £10.5bn made up of 57,800 loans, a fall in volume of 8 per cent on September and a drop of 13 per cent from October 2015.
First-time buyers borrowed £4.5bn, down 8 per cent on September and 2 per cent on October last year. This equated to 28,900 loans, down 8 per cent month-on-month and 4 per cent year-on-year.
Remortgage levels were up in October to £6.1bn, an increase of 11 per cent on September and up 7 per cent annually.
Despite buy-to-let borrowing falling 21 per cent year on year, it rose on a monthly basis in October, up 7 per cent to £3bn.
CML director general Paul Smee says: “Buy-to-let house purchase lending remains weak following the change to stamp duty on second properties in April. With lenders now tightening affordability criteria ahead of the Prudential Regulation Authority’s stress tests and the forthcoming tax relief changes next year, these lower volumes are likely to be the ‘new normal’.
“Home-owner and buy-to-let remortgage lending, however, has recovered and is running at its strongest levels since 2009. This appears to be linked to borrowers taking advantage of the re-pricing of mortgages following the base rate cut.”