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The Knimbies who say No

C M L Nov Lending Breakdown

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CML has published a detailed breakdown of the previously announced (but now revised down from £16.9Bn to £16.5Bn) gross lending figure for November 2014.


New CML data on the characteristics of lending in November 2014 show a decline in lending trends to first-time buyers, home movers and remortgaging, from the heights of November 2013; but a year-on-year increase in buy-to-let lending.

Monthly highlights:

##First-time buyers saw a month-on-month lending decline, with 25,900 first-time buyer loans in November - down 11% on October, and 3% down on November 2013. By value, there was £3.8 billion advanced to first-time buyers in November - 12% down on October but 6% up on November last year.

##Lending to home movers also declined month-on-month. The number of loans advanced to movers was 29,700, a 13% fall on the previous month and down 10% on November last year. By value, lending to movers totalled £5.4 billion, down 14% on October and 5% on November last year.

##Remortgage lending activity saw a decline month-on-month in November, with the number of remortgage loans totalling 24,000. This was 8% down on October and 16% down on November last year. The value of these loans (£3.6 billion) was down 10% on the previous month and down 14% on November last year.

##There were 17,700 buy-to-let loans in November, representing lending of £2.4bn. This was a decrease on the previous month with loan volumes down 10% and the value of these loans down 11%. Compared to November 2013, the number of loans increased 9% and the value of these loans went up 14%.

As previously reported, gross mortgage lending reached £16.5 billion in November. This is 11% lower than October (£18.6 billion), and 3% lower than November last year.

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As we know, the amount of buy-to-let lending is a national disgrace.

Don't get my vote.

They make their own decisions. Chase the capital gains, go for the capital preservation, the yields, as we enter unstoppable low-mid-high prime real estate deflation, and just before lenders and borrowers enter the new phase (below).

Lending could look very expensive even against low rates.

[Voice of renter-saver Khan]: I will walk over your cold corpses.

The conclusion to be reached after 10 years of madcap lending is that house prices are not a function of demand, but are simply a function of how much money the lenders are willing, and able, to advance. And how much qualifying borrowers are willing to borrow. Almost everything else is immaterial.


The psychological aspect of deflation and depression cannot be overstated. When the social mood trend changes from optimism to pessimism, creditors, debtors, producers and consumers change their primary orientation from expansion to conservation.

As creditors become more conservative, they slow their lending. As debtors and potential debtors become more conservative, they borrow less or not at all. As producers become more conservative, they reduce expansion plans. As consumers become more conservative, they save more and spend less.


With the value of real estate collateral falling, the true market value of construction and real estate loans will fall. Bankers and other lenders, like their predecessors after 1929, will not wish to magically turn one dollar of cash into a loan worth eighty cents, much less sixty cents. When the value of collateral falls, and the public's demand for saving safety rises, even easy money at the Fed (ECB) may not stop deflation.

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  • 406 Brexit, House prices and Summer 2020

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