The Council of Mortgage Lenders (CML) has said that a drop in lending after stamp duty changes last year may have flattered this year’s May lending figures.
The group said that the number of homebuyers were up 10 per cent on May last year on a non-seasonally adjusted basis, while total borrowing was up 16 per cent.
First-time buyer activity looked particularly strong. First timers borrowed £4.7bn, up 12 per cent both on last month and on May 2016. They took out 29,200 loans, up 13 per cent month-on-month and eight per cent year-on-year.
Alastair McKee, managing director of the UK-wide independent mortgage broker, One 77 Mortgages, said:“It is first-time buyer borrowing that continues to put in a strong performance here.
"They don’t need to be asked twice to step in take advantage of reduced competition from landlords whose borrowing is pretty flat in real terms, and depressed since April last year.”
David Hollingworth, from mortgage broker London & Country, said that limited supply and low mortgage rates would continue to support the market.
“Uncertainty created by Brexit and the recent election result is bound to play a part in consumer confidence especially as higher inflation makes its mark on households. With lending criteria holding firm borrowers can’t simply borrow more to continue to fuel ever higher prices. Nonetheless low mortgage rates and limited supply are likely to support prices,” he said.