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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/01/mortgage-advances-at-10year-low.jpg"><img class="alignnone size-full" title="Mortgage advances sunk to their lowest level for a decade during 2010" src="http://londonglossy.com/wp-content/uploads/2011/01/min-mortgage-advances-at-10year-low.jpg" alt="Mortgage advances sunk to their lowest level for a decade during 2010"/></a></p>
<p>Mortgage advances sunk to their lowest level for a decade during 2010 as the lending drought intensified.</p>
<p>A total of just £136.3 billion was lent during the year, the lowest level since 2000, and 5% below 2009&#8217;s figure, which was the lowest total for nine years, according to the Council of Mortgage Lenders (CML).</p>
<p>The group, which is predicting total advances of around £135 billion for 2011, warned that consumer demand could be even weaker than previously expected if inflationary pressures led to an early rise in interest rates.</p>
<p>Advances during the final month of the year were also low, with just £11 billion lent in December, the most subdued figure for the month since 2000 and 6% down on November&#8217;s total. It was also the fourth consecutive month during which lending levels had been the lowest for the month in question for a decade.</p>
<p>But while December is traditionally a quiet month for the mortgage market, there are few signs that lending levels will pick up during January.</p>
<p>The Bank of England&#8217;s Trends in Lending report showed that the number of mortgages approved for house purchase by the major lenders had dropped to just 40,000 during the month, the lowest level since March 2009 and down from 45,000 in November.</p>
<p>The number of homes changing hands also fell during December, with just 75,000 properties sold for more than £40,000, down from 77,000 in November, according to figures from HM Revenue &#038; Customs (HMRC).</p>
<p>CML economist Peter Charles said: &#8220;Money market rates have recently moved higher in anticipation of a rise in base rate and some lenders have recently reflected these increases in their product pricing.</p>
<p>&#8220;Against this backdrop, consumer demand may be weaker than we would otherwise have expected. Higher interest rates will also hit the budgets of existing borrowers, although the expected modest rises in base rate will result in a relatively small proportionate rise in monthly payments for most mortgage holders.&#8221;</p>
<p>He added that the group did not think this would have a big impact on the number of people who struggled to keep up with their mortgage, and it did not anticipate revising its current arrears forecast.</p>
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