GAGE lending has sunk to its lowest level since 2000 for five consecutive months, it was revealed yesterday.
In November lending dropped by five per cent to £11.1bn compared to the previous month, according to the Council of Mortgage Lenders (CML).
A huge 10 per cent drop from last year’s November figures is partly accounted for by a rush to seal property deals in November 2009 before stamp duty concessions expired.
Along with seasonal factors, the stamp duty changes make the drop appear worse than it is – yet the news still “reinforces the picture of a continuing flat market,” said CML economist Bob Pannell.
Gross mortgage lending for next year will level out at around £135bn, he said. Prior to the credit crunch, lending reached £363bn in 2007.
The Bank of England has shown mortgage approvals levelling down at around 45,000 per month, for September to November. Nationwide and the Halifax both showed slight falls in house prices for November.
“House prices will not crash but will trend down gradually to lose around 10 per cent from their peak 2010 levels by the end of 2011,” said Howard Archer of IHS Global Insight.
Tight credit continues to hold back the housing market, and some commentators fear a rise in interest rates could further deter buyers.
But low rates, low prices and high rental yields make the market “a great opportunity for anyone who is able to secure a mortgage,” said David Whittaker of Mortgages for Business.