Remortgaging remained strong, with the decline in gross lending driven by lower lending for house purchase. Gross lending in November totalled £22.3 billion, compared with £23.2 billion in October and £25.5 billion in November 2003.
Loans for house purchase declined from £10.3 billion in October to £9.3 billion last month (£12 billion in November 2003). House purchase accounted for 42% of mortgage lending in November, the lowest proportion since May 2003. Remortgaging grew to £10.6 billion in November, compared to £10.2 billion in October and £10.8 billion in November 2003.
There was a less marked drop in the number of loans for house purchase, which stood at 85,000 in November, compared to 91,000 in October. This represents a year-on-year fall of 25% from the November 2003 total of 113,000 and is the lowest monthly total of loans for house purchase since the 79,000 recorded in February 2003. Loans to first-time buyers comprised 30% of loans for house purchase, compared to 32% last month, a little above the average over the last two years.
The number of mortgage approvals in November suggests that the decline in lending looks set to continue into the new year.
In recent months, the largest fall in the number of loans has been in London and the south east. Lending in Scotland, Wales and Northern Ireland has levelled off, but not fallen to the same extent as in southern England
Commenting on the figures, CML Director General Michael Coogan said:
"The buoyancy of the housing market in the first half of the year means that the number of transactions in 2004 is likely to reach a 15-year high. It is inevitable that there will be a decline in activity going forward. January and February are traditionally weaker months for lending, and so we expect the figures to reflect a market slowdown until the spring. What is is apprarent is a picture of a slowing market, but one that should remain stable as we return to more normal volumes of lending over 2005 as a whole."