Barclays said it believed the housing market had now corrected from the slump of the early 1990s. But it added that further strong growth was now unlikely.
Jim Chadwick, marketing director, said: "The slight fall in lending should not be a cause for concern. Growth so far this year has been very healthy and we knew that the surges we saw last year could not be sustained long- term.
"Waning confidence is probably due to the year's interest rate rises. People need to realise that rates have now probably peaked and it is safe to consider moving or buying a house for the first time."
Lending in November slipped to pounds 6.7bn, down by 4 per cent from its October level of pounds 7.0bn. The company's mortgage index, which measures how much business has been done by all mortgage lenders, showed a slight fall of under 1 per cent last month in comparison with October last year.
More business is still being done compared with last year, but the growth of business has slowed down sharply. As recently as September, mortgage lending was over 10 per cent higher than in 1996. November was the first month which which lending fell year-on-year since September 1995.
Meanwhile, Halifax, the country's biggest mortgage lender with a 20 per cent share of the market, is boosting the interest paid on savings accounts from 1 January by at least 0.25 points. The savings rate rise follows a similar boost to Halifax's variable rate mortgages, to 8.7 per cent, following the Bank of England's quarter-point rate rise in early November.
But Halifax's rates on savings and current accounts still remain at least 2 percentage points below those of supermarkets and building societies such as Bradford & Bingley. For amounts less than pounds 5,000, its top rate is 4.3 per cent a year - against 6.8 per cent at Bradford & Bingley.