First drop since August cannot be accounted for by seasonal variation

Mortgage lending in November was down 10% from October, according to data published by the Council of Mortgage Lenders today, the first drop since August.

CML said that a small seasonal drop is typical, but the 10% difference between £12bn gross mortgage lending in November and the £13.3bn figure in October is more than usual.

The last time lending fell was in August, when it was down 13%, however the fall was explained by seasonal factors. After adjusting for seasonal factors, November's was the first month on month drop since June.

November's figures were also 14% down from the £13.9bn recorded in the same month in 2008.

The CML also predicted a quiet start to mortgage lending in 2010, due to the end of the stamp-duty holiday announced in the pre-budget report. CML economist Paul Samter said: "There could be a modest decline in underlying house buying activity in early 2010 due to the stamp duty holiday ending, with activity "bunching" over the last few months of 2009. But seasonal factors are likely to be the dominant driver over the next few months.”

Samter added that although there was a small increase in availability of mortgage credit, "there is no sign of a swift recovery in lending volumes, especially with remortgaging set to remain at subdued levels while low interest rates persist."