Their estimate is that total gross lending recovered to £12.9 billion in October. This would reverse the sharp dip reported for September, and imply that lending was 4% higher than the year earlier.
Special factors have distorted the monthly pattern of house purchase activity, but the underlying picture appears to have settled into a pattern of modest year-on-year growth.
By contrast, remortgage activity had been very subdued through 2012, with low back book rates limiting incentives to refinance onto new deals. However, over recent months the cumulative effect of increases in SVRs by some mortgage firms and more competitive mortgage deals – on the back of better funding conditions – appears to have re-kindled some remortgaging appetite.
While this is from a low base - the Bank of England reported 28,000 remortgage approvals in September - it does suggest that remortgage activity may act as less of a drag on overall lending going forwards.
CML chief economist Bob Pannell says:
“House purchase and remortgage activity both appear to have picked up recently, and this should be supported by an improvement in the availability and pricing of mortgages.
“The Funding for Lending Scheme is likely to have made an early positive impact, helping to counter some of the negative pressures associated with a protracted and weak economic recovery.”
Dan McLeod, director of the estate agency, Atkinson McLeod, commented:
"Despite the apparent pick-up in October, the mortgage market today is little different to how it was 12 months ago. Or 24 months ago. There is momentum and choice at lower loan-to-values, but higher LTV borrowers remain on extremely shaky ground.
"The first question we ask any prospective purchaser is this: what's your deposit? If they're above 85% LTV, you know they face an uphill struggle from day one.
"Estate agents have to look after the interests of the seller and buyers with a small deposit have an immediate question mark placed over them, irrespective of their earnings or affordability.
"5% deposit? 10% deposit? Not today, thank you.
"On a positive note, prospective buyers now know that it's pointless viewing properties they can't really afford and are approaching their property search with a much more realistic mindset.
"They understand that their search has to be well within their buying potential, as every bit of upwards pressure on the LTV makes the transaction less likely.
"HSBC's requirement to use its own solicitors alongside those of the prospective buyer is also holding things up. Dual legal representation by one of the UK's biggest lenders is a major stick in the spokes of an already slow transaction process.
"Given that so few transactions are taking place, you wonder why it's taking banks so long to process those that do. The only possible conclusion is that the banks are being forensic in their appraisal of applicants."
Richard Sexton, director of e.surv chartered surveyors, said:
“Ironically, the mortgage market seems to be thawing as we enter the winter months. Loans for house purchase rose 10% last month, and approvals were up on an annual basis for the first time in five months. The improvement is largely down to FLS, which has encouraged banks’ to increase lending.
"FLS has created a cacophony of debate, but it looks like we’re finally seeing it boost lending by supporting banks’ balance sheets with cheaper funds. The scheme has been aided and abetted by wider improvements in the economy, particularly to the labour market, but it’s unlikely to be enough to offset chronic ailments buried deep beneath the skin of the mortgage market, longer term.
"Banks are still required to put aside high capital ratios, which leaches funds away that could be used to increase first-time buyer lending - traditionally the engine room of the property market. And anaemic economic growth will act as a real drag on lending volumes, potentially for years to come. These broader underlying problems are likely to keep the mortgage market anchored at the subdued levels we’ve been accustomed to seeing post-2008.”
