Mortgage lending jumps in October

Gross mortgage lending in the UK rose significantly last month, a new study shows.

The Council of Mortgage Lenders (CML) published data which indicates that gross mortgage lending jumped from £30.6 billion in September to £32.4 billion last month - a rise of nearly six per cent.

October's figure also compares to £30.6 billion in the same month last year.

However, the CML added that the figure predominantly reflected approvals from before the mortgage market became affected by wholesale funding problems.

CML director general Michael Coogan commented: "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."

Last week, mortgage experts welcomed the Bank's suggestion that interest rates could be cut in the near future.

Peter Bolton King, chief executive at the National Association of Estate Agents, said: "It is really encouraging to see that it has recognised the effects that the past interest rate rises has had on the market and indeed consumer confidence."

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