Gross mortgage lending fell from £18.6bn in October to just £14.6bn in November – a massive 22% drop.
The Council of Mortgage Lenders says that in November 2007 almost £30bn worth of mortgages was completed. So year-on-year gross lending is down by a whopping 51%.
The trade body says that while there is typically a decline from October to November, this is considerably larger than usual reflecting the market disruption and continued deterioration of confidence in the economy.
The CML is also publishing mortgage market forecasts for 2009, but cautions that in the current challenging environment, the forecasts need to be seen as indicative, rather than as a precise assessment of likely activity.
Michael Coogan, director general of the CML, says: “In looking ahead to the coming year, the housing market will remain extremely subdued and net mortgage lending is likely to turn negative.
“Repayment problems will worsen against the backdrop of rising unemployment but lenders and government are working to try to reduce the negative impact on borrowers.
“Recent glimmers of light in terms of government intervention to improve conditions to support new lending are helpful, but more will be needed.
“2009 will be a challenging year, but borrowers who remain in employment will see some benefits in the form of lower mortgage rates.”