Mortgage lending fell to its lowest level for November for a decade as demand remained “heavily constrained”, figures have shown.
A total of just £11.1 billion was advanced during the month, 5% less than in October and the lowest figure for November since 2000, according to the Council of Mortgage Lenders (CML).
It was the fifth consecutive month during which total advances were at their lowest level for that month for a decade, the group said.
Lending during November was also 10% down on the £12.3 billion that was advanced in the same month of 2009.
The CML said the steep year-on-year fall reflected the distortion to the market caused in 2009 by the looming end of the Government’s stamp duty holiday, which caused people buying properties costing up to £175,000 to rush through sales before the end of the year.
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.”
He added that the CML expected mortgage advances to total £135 billion during 2011, unchanged from this year.
Meanwhile, figures from the Bank of England showed that only 45,000 mortgages were approved for house purchase by the major banks during November. The figure was slightly up on the 44,000 approvals seen in October and September, but it was still 26% down on November last year.
The Trends in Lending report showed that advances for house purchase remained subdued at £5.6 billion.