Mortgage lending plunges a further 5%

Mortgage lending fell 5% in November from the previous month and was down 10% on last year.

The Council of Mortgage Lenders said lending stood at £11.1bn, its lowest November total for a decade. It was the fifth consecutive month where total advances were at their lowest level for a decade, the group said.

The steep year-on-year fall reflected the distortion to the market caused in 2009 by buyers entering the market before the end of the government’s stamp duty holiday, the CML said.

Lenders said mortgage lending is set to remain low next year at £135bn, unchanged from 2010.

CML chief economist Bob Pannell said: “The fall in gross mortgage lending in November reflects the usual seasonal slowing of activity at this time of year, and reinforces the picture of a continuing flat market.

“Comparisons with the year earlier are somewhat distorted, as some households brought forward house purchase activity into the closing months of 2009 to take advantage of the stamp duty concession. But both demand for mortgage borrowing and the supply of funds for lending remain heavily constrained.”