Mortgage lenders continued to manage the housing market by restricting lending to a dwindling quota of borrowers, according to the latest lending figures. 

Banks and building societies advanced £6.3 billion to buy 44,000 homes in November – the latest period with available statistics. 

The figures include buy to let mortgage borrowing for the period. 

The figure continued the trend in declining lending – down from 46,000 mortgages worth £6.7 billion in October and from 50,000 mortgages worth £7.4 billion in September. 

In comparison to November 2009, lending was down 13% from £7.25 billion and the number of loans fell 15% from 52,000. 

Bad weather and a seasonal drop in the market probably means the figures will hit another low for December – and the Council of Mortgage Lenders (CML) has already indicated lending is unlikely to increase in 2011. 

Mortgage availability unlikely to ease 

Banks are tightening up lending, as they have to repay the billions pumped in to their coffers by the taxpayer during the credit crisis by June 2012. Lenders are also having difficulties in raising funds on wholesale markets due to continuing financial problems in the Eurozone. 

CML director general Michael Coogan said: “Funding and capital constraints on lenders will continue to exert a dampening effect on lending, and criteria are unlikely to loosen substantially.” 

The CML reports a similar trend for remortgages, with 26,000 loans worth £3.1 billion in November.  

This was the same figure as October but slightly down on September, when lenders granted 29,000 remortgages valued at £3.6 billion. 

Average loan-to-values – the ratio of mortgage borrowing to home values – now stands at 68% for movers and 80% for first-time buyers. 

With the average home costing about £165,000, the figure means a first time buyer needs a deposit of £33,000 to complete a purchase, while a home mover needs equity of about £52,800.  

Lenders are also demanding an income multiple of three times earnings to cover borrowing.

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