Business

Mortgage lending sees May bounce

Magnolia tree
Image caption The spring rise saw mortgage lending reach its highest level this year

Mortgage lending continued its spring rise into May, according to the British Bankers' Association (BBA).

The number of mortgages approved for house purchases rose to its highest level so far this year.

A total of 36,709 loans were approved by the major banks for people buying a property during the month.

However figures from HM Revenue & Customs (HMRC) show that completed property sales have been flat for the past three months.

Sales in May stood at 73,000, just 1,000 up on the number sold in both March and April.

Though higher than a year ago, the figures mean that sales so far this year are still running at less than half the level recorded in the same period during 2006, 2007 or 2008.

'Pay off borrowing'

The BBA, whose members account for 75% of new mortgage lending, said it was the third month in a row of rising mortgage approvals.

Households continue to pay off debts, according to the BBA.

"The low interest rate environment is resulting in customers choosing to reduce or pay off borrowing, particularly personal loans, rather than saving," said the BBA's director of statistics, David Dooks.

Re-mortgaging accounted for the lion's share of loan approvals with 24,626 taking out new or replacement loans on their existing property.

The number of home loans approved for house purchases had been 35,729 in April, up 685 on March.

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