Mortgage lending during November was down by almost two-thirds on the same month last year, it emerged today.

The British Bankers Association (BBA) said that just 17,773 mortgages approvals were approved during the month. This was down 14 per cent on October but down 61 per cent on November last year.

It said the average mortgage granted for a house purchase during the month was £117,000 — down almost 24 per cent on November last year.

There was also a sharp fall in the number of people re-mortgaging — suggesting that homeowners are finding it harder to find better deals.

The number of home loans approved for a re-mortgage fell to 29,798, the lowest for eight years, which was almost half the level for October.

David Dooks, the BBA’s statistics director, said: “High street banks are still providing two-thirds of all new mortgage lending, although the overall market continues to shrink. The November reduction in the Bank rate from 4.5 per cent to 3 per cent, caused lenders to reassess product ranges and borrowers to reconsider future borrowing costs, so consequently there was another drop in market activity.

“Volumes of mortgage approvals reached new lows and, with house prices still falling, the encouragement of lower costs had not filtered through by the month-end, largely because people remain concerned about the impacts of the rapidly slowing economy on their personal finances.”

Howard Archer, chief UK and European economist at consultancy IHS Global Insight, said the figures indicated that UK housing market activity remained “dead in the water”.

He added: “The outlook for the housing market remains bleak. Ongoing very tight credit conditions, still relatively stretched housing affordability on a number of measures, faster rising unemployment, muted income growth, widespread expectations that house prices are likely to fall a lot further and an unwillingness of many people to commit to buying a house when the economic outlook and job prospects look so bad form a powerful set of negative factors weighing down on the housing market.