For the first time since July 2005, there has been a decline in gross lending, the Council of Mortgage Lenders (CML) has announced.
The total figure stood at £30.7 billion for November, an eight per cent decrease from the corresponding period in 2006.
It is also an eight per cent decrease on October's £33.5 billion figure, the organisation reports.
Following a number of predictions of a market slowdown, the CML claims that lending is likely to continue to decrease during 2008.
"However, while lending will be subdued in coming months we see this as primarily a result of lack of available funding rather than lack of consumer demand," commented Michael Coogan, director general of the council.
The Royal Institute of Chartered Surveyors said the figures were evident that the credit crunch had hit the housing market.
It claimed that further cuts in the Bank of England's base rate would lend crucial support to the industry.
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