Rising by 2% on the previous month to an estimated £16.2bn, it remained 3% lower than the £16.8bn of lending seen in May the previous year.
Forward indicators of lending, such as Bank of England data on approvals, suggest that the market can expect an upturn in lending over the coming months, reflecting the CML's assessment that a modest recovery is under way.
CML economist Mohammad Jamei had this to say: “The economic environment is one that should support increased activity in the near term, coupled with low mortgage rates. But while we expect these factors to support activity, there is a limited upside, driven mainly by affordability constraints.”
Richard Sexton, director of e.surv chartered surveyors, comments: “The mortgage market has shown stability against all the odds. Last April saw the new MMR regulations come into play, whilst this April, we were anticipating the most uncertain election in a century. Against these headwinds, the lending recovery has been remarkably resilient. That stability is encouraging – signalling a potential sustainable long-term trend, rather than the volatile days of recent years.
The proportion of lending to borrowers with smaller deposits is holding steady, as banks continue to support first-time buyers. Wage rises are starting to look healthier, while the cost of living remains low, meaning household finances are starting to finally put on some muscle. The threat of mansion tax has lifted, and several housebuilding initiatives are underway. Any remaining caution left from the run up to the election is dissipating, and lenders are optimistic that the summer will see the market stretch its legs and get into its stride.”
Adrian Gill, director of Your Move and Reeds Rains estate agents, comments: “On an annual basis, mortgage lending in May is nothing to write home about. But more importantly, this represents the highest monthly lending total in 2015 so far, and after the winter hurdles it’s clear we’re pulling away into the straight.
Just like the fable of the hare and the tortoise, there’s nothing wrong with slow and steady. House prices set a new record in May, despite growth trotting along at a more measured pace. But looks to be a temporary breather. Since shrugging off the handicap of the General Election, buyer confidence is in much better form. Already in June agreed sales are galloping along, and the going is looking good all across the country, as the odds favour buyers and gee up demand.”
