CML shows lending recovered slightly in May
Lending figures for house purchases recovered substantially during May according to statistics from the Council of Mortgage Lenders.
The value of house purchase loans grew to £7.2bn in May, up 36 per cent on April, 29 per cent compared to May 2011 - demonstrating a turnaround in the lending slump which followed the abolition of the stamp-duty holiday for first time buyers in the March budget.
The CML said that the number of loans taken out also increased in May, rising by 33 per cent against April to 48,300, and by 24 per cent compared to May 2011, while remortgage lending also grew, with £3.5bn advanced for remortgages, up from £3.1bn in April.
However, the CML figures showed the figure is still down on May 2011, when there was a greater expectation of interest rate rises.
For first-time buyers, 18,100 loans, worth £2.3bn, were advanced to customers during May, up by 43 per cent on the previous month and by 22 per cent on last May, with average loans taken out coming to £104,000, up from £97,750 in April, and an average of 3.12 times the borrower’s income.
CML director general Paul Smee said: “It is positive news for the market that the slump following the end of the stamp duty concession seems to have been short-lived. Lending is similar to late 2011 levels and showing a healthy improvement on the same time last year.
“However, the problems in the eurozone have not gone away. Economic uncertainty could affect both the supply of mortgage lending and consumer confidence and we still anticipate a challenging lending environment for the rest of the year.”