By Daniel Hunter

The Council of Mortgage Lenders (CML) estimates that gross mortgage lending in September was £11.6 billion. This is 10% lower than August’s gross lending figure of £12.9 billion and a 15% fall from £13.7 billion in September 2011.

Gross lending for the third quarter of 2012 was therefore an estimated £37.3 billion, an 8% increase from the second quarter of this year (£34.5 billion) but a 5% decrease from the third quarter of 2011 (£39.3 billion).

"There have been hints of demand softening over recent months, but monthly patterns may have been distorted by the Olympics," CML chief economist Bob Pannell said.

"House purchase demand failed to lift significantly in the third quarter, despite much better mortgage availability. Remortgage activity continued to languish, in contrast to relatively strong levels a year ago."

Brian Murphy, head of lending at Mortgage Advice Bureau, said the data paints a mixed picture.

“The CML’s gross lending figures for September portray a mixed picture, with month-on-month lending down from August, but the Q3 figures were up on Q2," he said.

“However, the September lending figures refer to completions which were hit by the usual summer lull and the effect of the London Olympics. In contrast, MAB found mortgage applications actually increased last month, up 1.9% on August.

"Application activity has been boosted by increased availability of competitive mortgage deals and the launch of the Funding for Lending Scheme, which has seen a number of lenders have now begun to engage with the higher loan-to-value sector again.

“Nevertheless, we still need to see more lenders moving up the LTV curve before there will be any sizeable increase in housing transactions.”

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