Mortgage bounce eases fears

A REBOUND in mortgage lending last month suggests there is still life in the housing market. Figures from the British Bankers' Association and the Building Societies Association showed a bounceback in home loans in October after a decline in September.

The BBA said banks' mortgage lending totalled £4bn, just shy of August's record £4.07bn. The BSA said net advances by its members totalled £453m, a 55% increase on September. The Council of Mortgage Lenders, which collates figures from banks and building societies, said mortgage lending increased by 6.5% compared with the previous month.

Director-general Michael Coogan said: 'Lending levels are holding up but are lower than during the summer peak, which is to be expected at this time of year. It is still too early to tell how marked the effect of the slowing economy will be on mortgage lending, although the CML expects a cooler housing market in 2002.'

The Royal Institution of Chartered Surveyors said house price rises across Britain slowed sharply in the three months to October, with property values in London suffering the first fall since August last year.

HSBC's John Butler said today's mortgage figures suggested the housing market will slow, but not collapse.