Around £30 billion in mortgages was advanced to homeowners in September, a 12 per cent fall since August, new figures have shown.
The Council of Mortgage Lenders (CML) believes the findings show that demand for mortgages is down because of the Bank of England's decision to raise interest rates several times since August 2006.
However, while the fall was sharper than expected, lending last month was still up on the £29.2 billion lent to borrowers in September 2006.
CML director general Michael Coogan said he expects to see monthly lending levels slip below 2006 levels for the first time this year.
He went on to say that interest rate hikes will be exacerbated by recent liquidity problems in the mortgage market.
Meanwhile, research from the Building Societies Association reveals that net mortgage advances from building societies totalled £825 million last month.
In September 2006, the figure was £1,906 million.
See Also: Property News (6705)
Date Published: 22 October 2007
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