The British Bankers Association had a nasty post-christmas surprise for the property market. New mortgage lending dropped by 43.5 per cent last month compared with last November. UK banks lent just £4.3 billion to homebuyers last month, £500 million less than October, more than £1 billion below the average over the previous six months.
There is a simple chain reaction at work here; no mortgage lending means no demand for housing. No demand means falling house prices.