Gross lending totalled £23.3 billion in October, with loans for house purchase falling for the third month in a row. Gross lending was eight per cent lower than September's total of £25.4 billion and reached its lowest level since February this year. Overall, lending was 17% lower than last October's total of £28 billion.

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

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% 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%.

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

The balance between fixed and variable rate borrowing did not change significantly, but appeared to show the continuing sensitivity of borrowers to small movements in relative pricing.

As the average variable rate declined from 5.77% to 5.74% in October, its share of the market increased from 57% to 60%. The average fixed rate increased from 5.68% to 5.69%, and fixed-rate lending accounted for 38% of the market, compared to 37% in September. Capped rate lending declined to two per cent of the market, in line with its longer-term trend, as the average capped rate rose from 5.32% to 5.63%.

Commenting on the figures, CML 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."