This represents a 5% drop from £11.6 billion in October. Reflecting the distortion in lending that arose towards the end of last year's stamp duty concession, the November figure is 10% lower than the £12.3 billion advanced in November 2009.
As the lowest November total since 2000 (£10.9 billion), this is the fifth consecutive month where gross mortgage lending has been at its weakest since the equivalent month in 2000.
Bob Pannell, CML chief economist, commented:
"The fall in gross mortgage lending in November reflects the usual seasonal slowing of activity at this time of year, and reinforces the picture of a continuing flat market. Comparisons with the year earlier are somewhat distorted, as some households brought forward house purchase activity into the closing months of 2009 to take advantage of the stamp duty concession.
"But both demand for mortgage borrowing and the supply of funds for lending remain heavily constrained.
"The CML market forecasts published last week suggest that gross mortgage lending in 2011 is likely to remain at similar levels to this year. We estimate gross mortgage lending for next year will total around £135 billion."
Brian Murphy of independent mortgage broker, Mortgage Advice Bureau, said:
"The November gross mortgage lending figure is understandably distorted against the same month last year but there is no distortion to explain away the weakest November for 10 years. That's just a reflection of the weakened state the market is in.
"Demand is very weak at present for obvious reasons. People are worried about the economy, their jobs, their spending power, which is being eroded by rising inflation, and interest rate rises, which may come sooner than we would like if inflation rises further. This is a brutal winter for the mortgage market.
"With the almost month-on-month reduction in fixed rate pricing during 2010, and the protection fixed rate products offer against interest rate rises, almost two thirds of borrowers gravitated towards fixed rates last month.
“Average 5-year fixed rate deals fell slightly to 5.29% from 5.32% last month and 2-year deals also edged down a little further to 4.37% from 4.48% the previous month.
"Trackers also continue to offer great value with the average 2-year tracker down to 3.46%. And with products that allow borrowers who choose to take advantage of lower tracker rates in the short term but with the facility to switch into a fixed rate without penalty if rates do start to edge up, these borrowers have the best of both worlds.”
Matt Hutchinson, director of Spareroom.co.uk, said:
"While demand for mortgage borrowing is lower than it has been for a decade, demand for rentals has never been higher. This has resulted in average rents in some parts of the country rising by as much as 20%-25% in the past year alone.
"Currently, there is an average of seven applicants competing for every available rental room in the UK, and in some parts of the country there are as many as 20 applicants for every room, putting tremendous strain on the rental market."
"A combination of a shortage of new rentals coming onto the market and an ever-increasing number of people not able, or not willing to purchase has seen the ratio of people looking versus rooms available to rent reach record highs.
"Until the economy strengthens, consumers regain their confidence and lenders begin to lend more consistently, and more competitively, at higher LTVs, demand for rentals will remain exceptionally high."
Richard Sexton, director of e.surv chartered surveyors said:
“Last month we noticed the first loosening of credit conditions in the mortgage market since before the general election - with more mortgages being approved for borrowers and on more generous loan-to-value ratios. November turned out to be a rare bright spot for the mortgage market and the effects of that has not been felt in the numbers put out by the CML yet.
"There were some very attractive products available to homebuyers and that stimulated a lot of demand from borrowers, both to buy homes and to remortgage. The market usually goes very quiet in December of course, so the next big test for the market will be in the new year. January is the month to watch.”
