GROSS lending totalled £23.3bn in October, with loans for house purchase falling for the third month in a row, according to the latest figures from the Council of Mortgage Lenders (CML).

Gross lending was eight per cent lower than September’s total of £25.4 bn and reached its lowest level since February this year. Overall, lending was 17 per cent lower than last October’s total of £28bn.

At £10.3bn, loans for house purchase were also at their lowest level since February, when they totalled £9.3bn. But house purchase still accounted for 44 per cent of gross lending, as it did in September. Remortgaging, at £10.3bn, reached its lowest level since May’s total of £9.3 bn.

Although the number of loans for house purchase declined by nine per cent in October to 90,000, the effect was more pronounced for movers than for first-time buyers. As a consequence, first-time buyers accounted for 32 per cent of loans for house purchase, the highest proportion since April 2003 and the first time since March this year that they had accounted for more than 30 per cent.

The average advance to first-time buyers amounted to 88 per cent of the property’s value. Movers, who accounted for 68 per cent of loans for house purchase, borrowed an average of 68 per cent of the value of a property.

The CML’s director-general Michael Coogan said: “These figures are in line with other indicators suggesting that interest rate rises have had their desired effect and the housing market is slowing down.

“Although lending figures may fluctuate going forward, we expect the slowdown to continue through the winter months. However, interest rates are now probably at or near their peak so, despite the slowing market, the overwhelming majority of existing borrowers will be able to continue to afford their mortgage payments.”