Mortgage lending down year-on-year

Gross mortgage lending dropped by 7.7 per cent year on year in November, the Council of Mortgage Lenders (CML) has revealed.

The first year on year fall for two-and-a-half-years is a clear sign that the lending market is now feeling the knock-on effects of the five interest rate rises between August 2006 and July of this year.

Gross lending in November stood at £30.7 billion in November, the CML reported, a figures that was also eight per cent down on October's figure.

"As we had forecast, lending in November dipped below its 2006 - equivalent for the first time this year and we expect this trend to continue into 2008. However, while lending will be subdued in coming - months we see this as primarily a result of lack of available funding rather than lack of consumer demand," said CML director general Michael Coogan.

"An early easing in the liquidity squeeze seems improbable despite recent action from the Bank of England. As a result, we expect that some would-be-buyers will struggle to get the necessary finance," added Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyor.

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