By Daniel Hunter

While house purchase lending in the third quarter showed a 13% rise, monthly lending has not followed an even path during the quarter, according to the Council for Mortgage Lenders (CML).

On a monthly basis, September saw substantially lower house purchase lending than August, although remortgaging rose over the month.

Following a particularly strong August, a total of 44,400 house purchase loans were advanced in September, down from 53,900 loans last month and 48,800 loans in September last year.

This interrupted the underlying upward trend in house purchase lending we have seen since the end of last year but the third quarter still showed an increase with a total of 146,500 house purchase loans advanced — a 13% increase compared to the second quarter and similar to the same period last year.

Despite the drop in September, increased house purchase lending in July and August fed through to an 8.2% increase in total gross lending in the third quarter compared to the previous quarter.

Contributing to this quarterly growth was a rise in lending to first-time buyers and home movers. Lending to first-time buyers increased by 16% (with 57,000 loans advanced) while lending to home movers increased by 12% (with 89,600 loans advanced).

As for the monthly figures in September, lending to first-time buyers fell by 14% compared to August and by 3.2% compared to September last year. There were 17,900 loans to first-time buyers (worth £2.3 billion) compared to 20,700 loans advanced in August.

The average loan-to-value (LTV) ratio remained unchanged for first-time buyers in September at 80%, while loans to first-time buyers accounted for 40% of all house purchase loans. This was a higher proportion than the previous two months, reflecting the larger decline in the number of loans to home movers.

"While lending in September was slow after a particularly strong August, quarterly figures suggest that the underlying picture is more positive," CML director general Paul Smee said.

“An increase in house purchase approvals indicated by the Bank of England in September suggests that we may see a return to growth in coming months, but it may take some time before a boost from the Funding for Lending scheme is reflected in house purchase completions.”

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