Mortgage lending slumps in November

Mortgage lending for house purchases slumped nearly 10% to £10.7 billion in November as the winter slowdown set in.

Despite the dip lending was still 18% higher than in November 2014.

Home movers took out 32,300 loans, a drop of 10% on October, but up 20% year-on-year, according to latest CML data.

Homeowner remortgage activity was down 9% by volume and 14% by value compared to October.

Gross buy-to-let lending fell 8% by value as the steam came out of the private rentals market.

Paul Smee, director general of the CML, said: “As expected, mortgage lending activity eased back as the normal dip in the winter months began."

But Smee remained optimistic. “Our forecasts anticipate that gross lending will continue a slow but steady upward trajectory over the next two years.”

Brian Murphy, head of lending at Mortgage Advice Bureau, warned that rising interest rates could take some of the heat out of the market, especially with the US Federal reserve hiking in December.

“This will present a whole new ball game for recent borrowers who have never experienced rising rates.

“Any changes will be slight and gradual, and rates are likely to remain relatively low for some time: but today’s rock-bottom prices aren’t guaranteed forever.”

Jeremy Duncombe, director, Legal & General Mortgage Club, said the November decrease was largely down to seasonal variations, and long-term prospects looked positive.

“We expect lending for buy-to-let properties to spike ahead of the new stamp duty rate coming into force in March.”