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May recovery in mortgage lending

May recovery in mortgage lending

Category: Mortgages

Updated: 21/06/2012
First Published: 21/06/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Gross mortgage lending in May increased by 24% from the previous month, figures released today reveal.

The end of the Stamp Duty holiday on 24 March caused a first-time buyer rush to secure a mortgage, resulting in a 30% rise in lending to £13.4 billion in March, according to the Council of Mortgage Lenders' (CML) figures.

In April, however, lending dropped to £9.9 billion, but these latest figures reveal a recovery in lending to £12.2 billion for May.

Lending had increased by 13% from May 2011 when the figure was £10.8 billion.

These latest positive figures follow news last week that the Government has pledged to boost lending to small businesses and consumers by £80 billion.

"The Government has recently announced a number of measures to counter the adverse effects from the Eurozone crisis. It clearly senses an opportunity to bolster home ownership and housing activity, and we look forward to hearing more details about the 'funding for lending' initiative which seeks to deliver this," said the CML's chief economist Bob Pannell.

Mr Pannell warned that more fluctuations in lending were likely to appear this year.

"Meanwhile, mortgage lending continues to seesaw, albeit against a broadly flat market," he added.

"Unfortunately, a number of one-off factors, such as the Diamond Jubilee and the Olympics, are set to distort market indicators over the coming months, and it may be the autumn before we can more accurately gauge the state of the market."

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