"The seasonally adjusted data shows a less buoyant lending picture, with home buying activity remaining relatively unchanged month-on-month and remortgage lending gradually decreasing"
Buy-to-let and remortgage activity remained relatively unchanged in May from April.
On a non-seasonally adjusted basis, not accounting for the weakness in lending last May following the stamp duty changes, homebuyer figures were up 10% on April and first-time buyer lending rose 12%.
Home-owner remortgage activity was up 10% by value and 9% by volume on April, while gross buy-to-let totalled £2.9bn in May, up 16% on April and 12% compared to May last year. T
The average amount borrowed by home movers in the UK increased to £177,000 from £176,500 the previous month, while the average home mover household income decreased month-on-month from £55,200 to £54,900.
Paul Smee, Head of Mortgages at UK Finance, commented: "The apparent strong growth in mortgage lending in May might flatter to deceive. The relative weakness in lending last May following the stamp duty changes makes comparisons misleading. The seasonally adjusted data shows a less buoyant lending picture, with home buying activity remaining relatively unchanged month-on-month and remortgage lending gradually decreasing each month since January.
"In the summer months, we expect home buying activity to continue with an even split between first-time buyers and home movers but in greater numbers than in the winter months; we expect buy-to-let to remain subdued compared to its recent 2015 peak."
Paul Smith, CEO of haart estate agents, added: “Whilst there has been some recovery since the damaging introduction of a stamp duty surcharge last April, we still have a long way to go until we have a property market that is back to full health. Data from our own branches shows that the number of landlords registering to buy is down 30% on the year across England and Wales, and it is clear that far fewer landlords are investing in property. This could have serious long-term consequences for the rental market and lead to higher rents, putting those who are trying to save for a deposit in an even more difficult position.
“Affordability is clearly reaching a critical juncture as the average loan size increases whilst the average income decreases. Although rising first-time buyer borrowing demonstrates the appetite for home ownership in the UK, young people should not be left to stretch beyond their means, and Government should intervene with a tax break as a quick and straight-forward way to help them get onto the ladder."
