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CML: Mortgage lending slows in August

Gross mortgage lending declined by five per cent between July and August, according to the latest statistics.The Council of Mortgage Lenders (CML) has revealed that gross mortgage lending stood at £18.6 billion last month, down from the previous month's figure of £19.7 billion.However, this is still 13 per cent higher than August last year (£16.4 billion) and the highest lending total for the month since 2008 (£19.3 billion).CML chief economist Bob Pannell said: "The narrative of recovering house purchase and buy-to-let activity continued through August. However, it is important to be aware that this picture is being flattered by strong seasonal factors through the summer period."A gentle slowing of lending activity may now be in prospect, as a result of the continuing impact of tighter lending rules and a softening of the London market."According to Mr Pannell, the seasonally-adjusted gross lending figure of £17.1 billion in July was little changed on May and June, and a similar order of magnitude is predicted for August.This means that a plateau could have been reached in lending - an observation that may be corroborated by the Bank of England's latest report suggesting that housing market activity had stabilised at lower transaction levels than at the start of the year.Borrower appetite could be on the decline, according to the CML, and some of this may be due to the changes introduced as part of the Mortgage Market Review, which brought in affordability tests and imposed limits on high loan-to-income lending.However, alterations in the geographical tone of the housing market and in particular the softer conditions in the London market are also likely to have exerted an influence.The CML says it does not anticipate a short-term impact arising from the decision of HM Treasury to consult on the proposed regulation of the consumer-oriented portion of buy-to-let lending.It also suggested the Financial Policy Committee's review of Help to Buy is unlikely to have negative implications due to the fact that the policy has been well-targeted. 

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