Mortgage lending remained subdued in
May but advances are expected to pick up going forward as activity in
the housing market recovers, figures showed today.
A total of £16.8bn was advanced during the month, 3 per cent less than in May last year, and only slightly ahead of the £15.82bn lent in April, according to the Council of Mortgage Lenders
But the group said there were signs that a modest recovery was underway.
It said once seasonal factors were taken into account, lending would have been above £17bn, making it the third consecutive month that seasonally adjusted advances would have been above this threshold, the first time this has happened since the start of 2014.
A total of £16.8bn was advanced during the month, 3 per cent less than in May last year, and only slightly ahead of the £15.82bn lent in April, according to the Council of Mortgage Lenders
But the group said there were signs that a modest recovery was underway.
It said once seasonal factors were taken into account, lending would have been above £17bn, making it the third consecutive month that seasonally adjusted advances would have been above this threshold, the first time this has happened since the start of 2014.
The group also pointed out that forward
indicators, such as mortgage approvals, suggested the market was
heading for an upturn in lending over the coming months.
The number of loans in the pipeline for house purchase increased by 10 per cent in April compared with March, the biggest monthly jump since early 2009.
Mortgage approvals for people remortgaging were also up by 10 per cent, as homeowners looked to take advantage of the very competitive interest rates that are currently on offer.
Meanwhile, unemployment is continuing to fall, wages are rising and interest rates look set to remain at their current record low until next year.
Mohammad Jamei, CML economist, said: “The economic environment is one that should support increased activity in the near term, coupled with low mortgage rates.
“But while we expect these factors to support activity, there is a limited upside, driven mainly by affordability constraints.”
Strong house price growth has pushed up the average cost of a UK property to £266,187, according to Zoopla.
Meanwhile, data from mortgage lender Halifax shows that the house price to earnings ratio increased to 5.16 in May, the highest level since May 2008.
The number of loans in the pipeline for house purchase increased by 10 per cent in April compared with March, the biggest monthly jump since early 2009.
Mortgage approvals for people remortgaging were also up by 10 per cent, as homeowners looked to take advantage of the very competitive interest rates that are currently on offer.
Meanwhile, unemployment is continuing to fall, wages are rising and interest rates look set to remain at their current record low until next year.
Mohammad Jamei, CML economist, said: “The economic environment is one that should support increased activity in the near term, coupled with low mortgage rates.
“But while we expect these factors to support activity, there is a limited upside, driven mainly by affordability constraints.”
Strong house price growth has pushed up the average cost of a UK property to £266,187, according to Zoopla.
Meanwhile, data from mortgage lender Halifax shows that the house price to earnings ratio increased to 5.16 in May, the highest level since May 2008.
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