Low-deposit lending in New Zealand halved in the first month of a new speed limit to restrict such lending, but a surge in high deposit lending more than offset the fall, raising the prospect it may not slow the housing market as much as planned.The Reserve Bank of New Zealand reported that loans with a loan-to-valuation ratios of over 80 per cent fell to NZ$571 million in October from NZ$1.19 billion in September. The RBNZ reported that the major banks subject to the lending restriction had reduced high LVR lending to 12.8 per cent of new mortgage flow in the first month of the new policy. After exemptions, this lending was 11.7 per cent of new flow. The Reserve Bank is targeting an average of 10 per cent after exemptions over the first six months of the policy.This is down from 25.5 per cent in September and around 30 per cent earlier in the year, before the Reserve Bank announced plans to limit such lending to try to reduce the risks to the banking system if there was a sharp fall in house prices, which it views as over-valued.RBNZ deputy governor Grant Spencer said the share of high LVR lending was expected to fall further over the coming months as pre-approvals run down."While there has been a significant reduction in high-LVR lending already, it is too early to assess what impact this is having on aggregate housing market activity and credit growth," Spencer said.The figures also showed a surge in lending to those borrowing less than 80 per cent of the value of the property as banks ramped up their marketing activity and cut their interest rates to this unrestricted type of lending.Low LVR lending rose to NZ$3.89 billion in October from NZ$3.16 billion in September.Economists said this suggested the impact on house prices from the high LVR speed limit may be softened by a ramp up in low LVR lending as the market 'bi-furcated' between high and low LVR lending."This is important as it suggests that the LVR limits have led to a shift in the composition of home buyers, ameliorating the overall impact on the housing market," Westpac Economist Michael Gordon said.