"Looking ahead, there is likely to be considerable uncertainty as a result of the EU referendum decision."
- CML
This marks the highest May figure since 2008 when gross lending reached £23.7 billion.
CML senior economist Mohammad Jamei said: "As expected, lending continued to be somewhat dampened in May, reflecting the earlier rush in the first quarter to beat the stamp duty change on second properties.
"Looking ahead, there is likely to be considerable uncertainty as a result of the EU referendum decision. We expect this to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait-and-see attitude until the dust begins to settle. Market fundamentals underpinning house prices still look sound, and we do not expect significant house price falls, especially given the current supply demand imbalance."
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "May’s lending figures are in line with expectations, reflecting investors’ bringing forward buying decisions to the first quarter of the year to beat the stamp duty hike.
"Of more concern now is how the markets react to the Referendum result. In the short term, not a great deal will change. Mortgage availability is good, banks still want to lend and interest rates are at an all-time low.
"The remortgage market is likely to continue to be aggressive with some competitive deals to attract borrowers, particularly as the likelihood of an interest rate rise has been pushed further back.
"However, when there is uncertainty it affects confidence and people put off making decisions. Those who were thinking about buying property may now decide to leave that decision to say next year, in the hope that property prices will fall in the meantime.
"The luxury end of the housing market is likely to be impacted. Some buyers may try to renegotiate deals that have already been done but on the other hand if sterling looks cheap it may attract more overseas investors."
