Gross mortgage lending increased 12% in May

According to new data from the Council of Mortgage Lenders, gross mortgage lending totalled an estimated £11.3 billion in May, which represented a 12% increase from the £10.1 billion lent in April, and was 1% higher than in May 2010. Gross mortgage lending includes lending for both house purchase and remortgage.

Despite a modest increase in overall lending activity during May, lending for house purchase is still running below year earlier levels, as indicated by the Bank of England’s April approvals data. With expectations of interest rate increases this year beginning to recede, interest in remortgaging is now expected to be on the decline also. The MPC kept rates unchanged for the 27th successive month.

CML Director General, Michael Coogan, comments:

“Gross mortgage lending in May recovered after low activity levels in April. Distorting effects from Easter and bank holidays cloud the current picture, but the likelihood seems to be for essentially flat levels of lending over the next couple of months.”