A slowdown in mortgage lending has begun, according to the latest data from the Council of Mortgage Lenders (CML).  Borrowers in search of a house obtained 5% less for the purpose of buying a house in the month of August, compared with the month of July.  Gross mortgage lending however, was almost 15% higher during the month of August compared with the same time last year.  This is also the biggest August for lending since the year 2008.

August typically is a slow month for mortgage lending, but this year has set a new standard.  The Mortgage Market Review, in place since April, was devised to place more sensible lending criteria on area banks.  It was also expected to slow lending.

The CML is under the impression that the drop in the amount of lending is implying a tightening in lending overall is currently underway.

Bob Pannell of the CML commented on the current lending trend, saying: "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."

Howard Archer, chief economist at IHS Global Insight, commented on the current tone of the housing market, saying: "More stretched house prices to earnings ratios, the prospect that interest rates will start to rise before long (albeit gradually) and tighter checking of prospective mortgage borrowers by lenders will likely have some limiting impact on buyer interest."

The remortgage market is prime to become more active as the change in base rate is prompting many house owners to look at their current situation and see the benefits before them with a remortgage.