November gross mortgage lending was barely half the amount of a year ago, the Council of Mortgage Lenders has revealed.

The estimated £14.6b was also 22 per cent down on October.

‘While there is typically a decline from October to November, this is considerably larger than usual reflecting the market disruption and continued deterioration of confidence in the economy’, said CML.  

‘In looking ahead to the coming year, the housing market will remain extremely subdued and net mortgage lending is likely to turn negative’, said CML director general Michael Coogan.

‘Repayment problems will worsen against the backdrop of rising unemployment but lenders and government are working to try to reduce the negative impact on borrowers.

‘Recent glimmers of light in terms of Government intervention to improve conditions to support new lending are helpful, but more will be needed. 2009 will be a challenging year, but borrowers who remain in employment will see some benefits in the form of lower mortgage rates’.

Meanwhile the major banks have announced that net mortgage lending rose by £2.9b last month - less than in October and below the average for the previous six months.
         
The numbers of approvals for all types of mortgage lending were lower than October.

’High street banks are still providing two thirds of all new mortgage lending, although the overall market continues to shrink’, said British Bankers’ Association statistics director, David Dooks.  ‘The 1.5 per cent November reduction in Bank Rate caused lenders to re-assess product ranges and borrowers to re-consider future borrowing costs, so consequently there was another drop in market activity.  Volumes of mortgage approvals reached new lows and, with house prices still falling, the encouragement of lower costs had not filtered through by the month-end, largely because people remain concerned about the impacts of the rapidly slowing economy on their personal finances’.