Gross mortgage lending up 5% in October

October gross mortgage lending was an estimated £13.5 billion, a 5% rise from £12.9 billion in September but down 27% on £18.5 billion in October 2008, according to the Council of Mortgage Lenders.

This is typical seasonal activity between September and October - the average monthly rise over the last decade has been 5%.

The annual comparison should start to improve a little in the coming months as underlying lending volumes dropped sharply in the latter part of 2008 and early 2009.

The October outcome is in line with our updated forecast for gross lending of around £141 billion for 2009 as a whole. We expect some seasonal slowdown over the remainder of this year.

In today's CML market commentary, CML economist Paul Samter observes: "There has been a significant change in the type of lending taking place from the start of the year. House purchase activity has picked up significantly. In contrast, remortgaging has dropped to decade-low levels as many borrowers have little incentive to refinance when they move onto low reversion rates, and others find themselves unable to do so due to equity constraints.

"The coming months are likely to be dominated by seasonal factors rather than underlying change."