But the figures from the Council of Mortgage Lenders also show that lending was still 23% higher than the £16.1 billion lent in November last year.
CML economist Mohammad Jamei pointed out that lending is set to finish the year stronger than it started, with the pace of lending recovering over the summer months.
‘As we’ve said for the best part of 2015, lending continues to be supported by strong fundamentals, which are low inflation, strong wage growth, an improving labour market and competitive mortgage deals,’ he said.
‘Reflecting this recovery, we estimate lending this year to reach £214 billion, up from our earlier estimate of £209 billion. Looking ahead, upside potential appears limited as a result of affordability pressures and new supply challenges which will continue to weigh on activity,’ he added.
Peter Rollings, chief executive of Marsh & Parsons, believes that a seasonal slowdown at the end of the year is to be expected although the strengthening economy and favourable lending conditions means that sales haven’t tailed off like they did last year.
‘The recent measures announced by the Government to build new homes and offer help to those looking to take their first step on the property ladder are welcome gestures, but it will be some time before this intervention is evident in the various monthly indices,’ he explained.
‘The powers that be also need to be careful of artificially stimulating the market at the bottom end while continuing to penalise those in the upper reaches,’ he added.
Adrian Gill, director of Reeds Rains and Your Move estate agents, believes that mortgage lending has been good over the past year, with loan values showing a huge annual margin in November.
‘When we consider that many of these loans will have been agreed before the added impact of the Chancellor’s Autumn Statement housing announcements, it bodes well for early performance in 2016,’ he said.
He pointed out that demand is high, remortgaging activity continues to pick up and first time buyers are benefitting from competitive mortgage rates while the buy to let market has been the most dynamic recently.
‘With a new stamp duty levy for second homes coming into play next April, there will only be a further rush to secure buy to let investment before the cost of completing a purchase rises,’ he said.
But he also pointed out that this will pit landlords against first time buyers even more. ‘As the deadline creeps closer, we may see another trend emerge in the spring as canny buy to let investors seize the opportunity to sell up and profit from the triple whammy of impending tax changes, low supply of homes, and high demand. Demand is accelerating, and there will be jostling for a decreased number of properties available on the market. So it will be interesting to see the effect this may have on prices and affordability,’ he added.
However, according to Henry Woodcock, principal mortgage consultant at IRESS, the November figures are disappointing in comparison with the rest of the year. ‘The seasonal slowdown heading towards Christmas has clearly taken its toll already, as consumers focus more on holiday spending and the supply of houses coming onto the market diminishes,’ he said.
‘Despite this, 2015 has been a good year for overall growth in the mortgage market, and we expect a strong start to 2016. Although the Bank of England will be applying greater scrutiny to buy to let, we expect this sector of the market to support overall mortgage lending in the first quarter, as prospective landlords rush to beat the April deadline following the Chancellor’s changes to stamp duty for investors,’ he added.
Rishi Passi, chief executive officer of Oblix Capital, also believes that the dip was unexpected and thinks it can be attributed to unease in the industry ahead of government changes, along with seasonal factors.
But he does not believe that it should cause any immediate alarm for established players in the market. ‘Short term, we’re likely to see a spike in sales as landlords race to complete property purchases before the 3% stamp duty surcharge comes into play in April 2016, however only time will tell how the market responds longer term,’ he added.
