The gloom surrounding the property market deepened today as lending figures showed double digit declines for house purchase and remortgaging in October.
Lending for house purchases fell 12% year-on-year to £6.7 billion in the month, while loans for remortgages slumped 24% to £3.1 billion, according to the Council of Mortgage Lenders (CML).
The CML also revised down figures for overall lending in October, to £11.6 billion, which is 15% lower than a year ago and 6.5% below the level seen in September.
It had previously estimated that lending fell 9% year-on-year and was unchanged from September.
Month-on-month, the CML said lending in October for home purchases dropped 6% to £6.7 billion.
The drop in lending comes after declining house prices and because of a rush to take advantage of a stamp duty holiday a year ago, according to the CML.
The lending figures are the lowest for October since the CML started taking monthly readings in 2002.
Loans to first time buyers, who are a key driver of growth in the housing market, declined 17% year-on-year and 9% month-on-month to £2 billion.
There was some evidence mortgage providers are starting to lend money more freely again as the average first time buyer borrowed 80% of the value of a home, compared to 76% in September.
But drops in house prices meant loans were less as a proportion to pay.
Lending for home movers fell to £4.7 billion, a 10% drop year-on-year, said the CML.
Michael Coogan, director general of the CML, said: "Consumer confidence has also been affected by October's spending review, despite the relative affordability of monthly mortgage payments, and so a stable but small lending market will continue for some time to come."
Halifax said yesterday that house prices dropped 0.1% during November and by 0.7% in the three months to November against a year earlier.
However, the lender said there were signs homeowners were becoming more reluctant to put properties on the market, which would help slow the recent quarterly falls in house prices.
Some economists forecast prices will crash by as much as 10% in 2011 from their peaks in 2010.