Gross mortgage lending slumps in November

Gross mortgage lending fell to an estimated £12 billion in November, the Council of Mortgage Lenders (CML) has reported.

The total represents a 10% decline from £13.3 billion in October and is 14% below the gross figure for November 2008.

The lenders’ body suggests a modest seasonal decline between October and November is typical, but concedes that a 10% fall is “a little larger than normal”.

Reassuringly, the Council believes market conditions are still “holding steady” and no change in this position is expecting in the coming months.

However, CML economist, Paul Samter, cautions: “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.”

He adds: “There has been a modest increase in the availability of mortgage credit recently, including some tentative signs of a few higher LTV products emerging.”

But according to Mr Samter, there is no swift recovery in sight for lending volumes, particularly as remortgaging is likely to remain subdued while interest rates are low.

Earlier this week, the National Association of Estate Agents (NAEA) reported that sales to first-time buyers fell to 19% in November, their lowest level since December 2008.

The proportion was also substantially down from the May peak of 45% and estate agents blamed the January end to the stamp duty holiday for the slump.

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