The twelve-month growth rate remained unchanged at 0.8% .
Within total lending, lending secured on dwellings rose £1.1 billion, slightly higher than the previous six-month average increase of £0.8 billion. The three-month annualised growth rate increased 0.1 percentage points to 0.9% and the twelve-month growth rate remained unchanged at 0.7%.
Gross lending secured on dwellings was £11.2 billion in May, close to the previous six-month average of £11.3 billion. Repayments in May were £10.7 billion, slightly lower than the previous six-month average of £11.1 billion.
The number of loan approvals for house purchase (45,940) increased in May but was slightly lower than the previous six-month average (45,957).
Approvals for remortgaging (28,759) and other purposes (20,491) also increased in May but were lower than the previous six-month averages (32,164 and 20,673 respectively).
Consumer credit rose by £0.2 billion in May compared to the previous six-month average increase of £0.4 billion. The twelve-month growth rate decreased 0.1 percentage points to 1.4%.
Within consumer credit, credit card lending remained broadly unchanged while other loans and advances rose £0.1 billion in May.
Brian Murphy, head of lending at independent mortgage brokers, Mortgage Advice Bureau, comments:
"A rise in the number of approvals for house purchase was always likely after the long Bank Holiday that was April but the fact that there was only a slight increase in May underlines just how weak the mortgage market still is.
"A raft of insolvencies data over the past week and reports confirming that even the slightest rise in rates would tip many homeowners over the edge add to the feeling that a rise in Bank Rate is now unlikely to happen this year. Consequently the remortgage market looks set to remain fairly flat as people bank on rates staying put.
"The UK economy is still very much in intensive care while the property market, with the exception of London, is falling further into the red. Throw in the ongoing drama that is Greece and it's no surprise that prospective buyers are ultra-cautious.
"On a positive note, we have seen a fairly strong June to date, which is encouraging for this time of the year."
Nick Hopkinson, Director of property firm PPR Estates, comments:
“It’s clear that there has been no ‘Spring bounce’ in the UK housing market this year with new loan approvals for home purchases actually less in May than they were in February in the depths of winter.
"Even at the height of summer the overall UK property market remains frozen at winter transaction levels as sellers, lenders and borrowers are all scared off.
“As an active landlord, it’s been clear to me for some time that there are many thousands of home owners who are hanging on to their homes by a thread as they struggle with increasing inflation and falling household incomes, even though interest rates remain at historic lows.
"Recent admissions by senior bankers that they have been allowing people to move to interest-only mortgages on a large scale to keep repossessions artificially low confirms what many property experts suspected.
“Unfortunately, this strategy will only make the inevitable interest rate time bomb much worse for both the banks, the individuals concerned and confidence in the overall market when interest costs have to increase.
"With austerity measures getting into full swing, retailers failing daily and consumer sentiment on the floor it can only be a matter of time before the real value of many people’s homes is exposed as much lower than they might wish to think regardless of what happens to interest rates.”
