Mortgage lending in November was down by 10% over October, and is expected to remain stable or drop slightly in the coming months, according to new data released by the Council of Mortgage Lenders today.
This should not set alarm bells ringing, however. A slowdown is normal for the time of year, due to seasonal factors and, this time round, the end of the stamp duty holiday on 31 December. These factors caused a â ‘bunching’ in house buying activity over the last few months of 2009.
Gross mortgage lending in November totalled £12bn, compared to £13.3bn in October.
The Council for Mortgage Lenders’ economist Paul Samter said: “There could be a modest decline in underlying house buying activity in early 2010 due to the stamp duty holiday ending.”
“There has been a modest increase in the availability of mortgage credit recently, including some tentative signs of a few high loan-to-value products emerging. But there is no sign of a swift recovery in lending volumes, especially with remortgaging set to remain at subdued levels while low interest rates persist.”
No change in interest rates is expected from the Bank of England in the coming months, according to the CML, and seasonal factors will continue as the dominant driver into a sluggish 2010.
There are currently 11m mortgages in the UK, with mortgages worth over £1.2 trillion.
