It rose by 2% on the previous month to an estimated £16.2 billion, but was 3% lower than the £16.8 billion of lending undertaken in May 2014.
However forward indicators of lending, such as Bank of England data on approvals, have suggested that the market can expect an upturn in lending over the coming months.
CML economist Mohammad Jamei commented:
“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.”
John Eastgate, Sales and Marketing Director of OneSavings Bank, said:
“You might say that mortgage market activity is back with a vengeance, but if you look beyond the minimal effects of uncertainty surrounding the General Election it never went away. Borrowers and new buyers continue to exhibit strong demand for mortgage finance.
"This will feed through into June and July’s lending data when it is published. The UK housing market remains solidly anchored, with activity in the buy to let sector notably strong."
Henry Woodcock, Principal Mortgage Consultant, IRESS, said:
“Following a stagnant lending period steeped in political and economic uncertainty, the mortgage market is now starting to respond. The outcome of the General Election has given the market the much needed confidence boost to encourage lending once again, ending uncertainty, leading to higher lending volumes than we have seen in recent months.”
“Demand for buy to let finance, especially remortgages will continue to underpin the market. Added to that, low interest rates and the ongoing mortgage price wars will encourage demand. We do not view this increase as a short term phenomenon – with interest rates unlikely to be hiked, and consumer finances improving, growth should continue into the second half of 2015.”
Richard Sexton, director of e.surv chartered surveyors, added:
“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.”
