Despite a decline in gross lending for September, the remortgaging market continued to grow.

According to research by the Council of Mortgage Lenders (CML), remortgaging increased from £11 billion in August to £11.1 billion over the next month. It saw a growth of over £1 billion compared with the same period in 2006.

CML director general Michael Coogan said: "We expect remortgaging to continue to hold up as borrowers coming off fixed-rate deals look to refinance."

However gross lending was at £30.6 billion during September, compared to £34 billion the previous month. Borrowing for house purchases decreased from £16.2 billion in August to £12.7 billion.

"Affordability is likely to continue to restrain buying activity," explained Mr Coogan.

The CML recently predicted that the mortgage market would be slower but "by no means a stagnant one" next year. It expects gross lending to reach £360 billion in 2007 but decline to £340 billion during 2008.

© Adfero Ltd