Mortgage lending rebounded in May, CML says
Mortgage lending rebounded strongly in May, lenders have reported.
The Council of Mortgage Lenders (CML) said the number of new loans granted to home buyers jumped by 33% from April to 48,300.
The CML said the rise was a rebound from a brief slump that followed the reintroduction of 1% stamp duty for first time buyers on 24 March.
Lending in May was up 24% compared with a year earlier, despite the continued rationing of mortgage lending.
Paul Smee, the CML's director general, said the latest figures were "positive news".
"Lending is similar to late 2011 levels and showing a healthy improvement on the same time last year," he said.
"However, the problems in the eurozone have not gone away.
"Economic uncertainty could affect both the supply of mortgage lending and consumer confidence and we still anticipate a challenging lending environment for the rest of the year," he warned.
The most recent figures from HM Revenue & Customs (HMRC) showed that the number of completed sales in the first five months of this year was 11% higher than in the same period last year.
Mark Harris, of mortgage broker SPF Private Clients, said the CML's figures were encouraging.
"Now that the distorting effect of the stamp duty holiday is out of the way, the housing market looks to be in better health than previously thought," he said.
"The number of new mortgages taken out is greater than this time last year, although still some way off the volume of deals done at the height of the market."
But Howard Archer, of IHS Global Insight, doubted that the pick up in May would be sustained.
"While the CML data show a welcome pick up in housing activity compared to April, it is still very low compared to long-term norms," he said.
"We seriously doubt that there will be any significant pick up in housing market activity in the near term at least given the weak economic fundamentals, uncertain outlook and low consumer confidence."