Despite a raft of statistics pointing to a declining housing market, some property professionals continue to talk up the market
Gross mortgage lending in November was an estimated �11.1bn, down 5% from October's �11.6bn and the lowest November total since 2000, according to latest figures from the Council of Mortgage Lenders (CML).
The November figure is 10% lower than the �12.3bn advanced in the same month last year, and is the fifth consecutive month in which gross mortgage lending has been at its weakest since the equivalent month in 2000.
Bob Pannell, CML chief economist, says the November figures reflect the usual seasonal slowing of activity at this time of year, but it "reinforces the picture of a continuing flat market".
He argues that comparisons with last November are distorted because some households brought forward house purchase activity into the closing months of the year to take advantage of the stamp duty concession. However, he adds that 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," he says. "We estimate gross mortgage lending for next year will total around �135bn."
Viewed with a longer-term perspective, last month's figures point to serious problems in the housing market. Borrowers are clearly nervous, unwilling or unable to buy property in the current environment, while house prices are falling and prospective buyers and homeowners face the prospect of interest rate rises next year.
Meanwhile, the Bank of England reports today that mortgage approvals for house purchases from the major banks totalled 45,000 in November. This was down 26.2% from 61,000 in November last year, although it was marginally up from 44,000 in October and September, which were the lowest levels since April 2009.
Howard Archer from IHS Global Insight says the CML's picture of a continuing flat market reinforces his belief that house prices will not crash, but gradually lose around 10% from their peak levels this year by the end of 2011. "The small drop in house prices in November reported by both the Nationwide and the Halifax is consistent with this view. Given that house prices have already fallen by some 3% overall in recent months, we believe house prices will fall by around 7% in 2011."
Yet one website is reporting a rise in the price of new homes, with the average new build costing �220,654 in November, and the number of new homes on the market trebling between September and November. Smartnewhomes.com says this represents a price rise of 4% on October.
Marketing director Steve Lees says: "Given the downbeat mood at the turn of last year, 2010 has been much better than expected for the new homes industry, and there are now plenty of reasons to feel confident heading into 2011.
"Firstly, consumers are now much more aware of the benefits of buying new. With VAT going up to 20%, the cost of upgrading an older property will increase significantly from January, and with energy prices already rising sharply the financial argument in favour of energy-efficient new homes is growing ever stronger."
But the website also calculates that the price of new homes has risen by 1.1% over the past year ? much lower than inflation, indicating that developers might be struggling to sell homes and are keeping prices near static in order to shift them. Anyone who finds these figures enough to boost their confidence might be advised to lay off the Christmas sherry.
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