During November, net mortgage lending rose by £2.9 billion; less than in October and below the average for the previous six months according to the latest data from the British Bankers Association.

The BBA said the numbers of approvals for all types of mortgage lending were lower than October.

Net mortgage lending dropped in November as the annual growth rate declined from 10.6% to 10.3%. Gross lending in the month was 4% lower than in October and 38% lower than a year earlier. Overall, approval activity decreased during November.

Approvals
Approvals for house purchase in November were also lower than recorded in the previous month. Approvals for re-mortgaging in November were almost half what they
were in October and the previous six months.

Approvals for equity withdrawal & other purposes were 5% lower than in October.

BBA statistics director, David Dooks, said of the latest data: “High street banks are still providing two-thirds of all new mortgage lending, although the overall market continues to shrink.

The 1.5% November reduction in Bank Rate caused lenders to re-assess product ranges and borrowers to re-consider future borrowing costs, so consequently there was another drop in market activity. Volumes of mortgage approvals reached new lows and, with house prices still falling, the encouragement of lower costs had not filtered through by the month-end, largely because people remain concerned about the impacts of the rapidly slowing economy on their personal finances.

“There was an increase in deposits, in part reflecting the receipt of savings reclaimed from accounts in Icelandic banks.”