Mortgage approvals for house purchase fell to 61,267, down from 64,054 in August. Net mortgage lending, which lags trends in approvals, rose by £1.8bn in September, down from growth of £2.2bn in August.
Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association, said the stats show that the market is still has a way to go before it settles into a period of stable growth.
He said: “Today’s mortgage approval figures show the last nine months have brought a series of peaks and troughs that are out of line with the usual seasonal patterns.
“After reaching almost 125,000 approvals in January, it was entirely predictable that numbers would fall as the Mortgage Market Review (MMR) took effect.
“However, subsequent activity shows we are yet to settle back into stable growth, with another peak in July followed by two months of decline.”
The IMLA chair added there are “exceptional circumstances still impacting the market” following the arrival of lending caps and higher stress tests.
He said: With base rate speculation also impacting consumer appetite and product pricing, there have been forces pulling in opposite directions – making it difficult to judge the overall path of travel and what ‘normal’ activity looks like under MMR.
“What’s clear is that house prices are not causing the same concerns that they were at the beginning of summer and mortgage businesses have also negotiated a period of significant change without the market falling away.
“What must now follow is a period of review to ensure that the recovery remains on track and that brokers are still equipped with the products they need to meet customer needs.”