Mortgage lending grew in October

News Category: Industry News

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Mortgage lending rose last month, but the situation is unlikely to improve further in the near future, a mortgage association has claimed.

According to figures published by the Council of Mortgage Lenders (CML), gross lending grew by six per cent in October compared the previous month, increasing to an estimated £32.4 billion.

However, the group warned that pressures resulting from recent turmoil on global financial markets will soon lead to restrictions on lending activity, increasing the cost of loans for any landlord looking to take out a mortgage.

CML director general, Michael Coogan, said: "The next few months will be a testing time as ongoing pressures in financial markets feed through into the wider economy. Funding constraints will continue to restrict lending activity and make loans more expensive.

"The Bank of England's recent Quarterly Inflation Report reinforced the likelihood of a reduction in rates early next year, and that should provide some relief for borrowers sooner rather than later," he added.

The CML recently predicted that UK house price inflation would stall in 2008, falling from its current rate of 9.7 per cent.

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