Mortgage lending increased to £14.7 billion last month – the highest monthly estimate for gross mortgage lending since October 2008.
The Council of Mortgage Lenders revealed how the latest figures represented a rise of 21 per cent from £12.2 billion in April and 17 per cent higher than the total of £12.6 billion in May 2012.
Bob Pannell, the CML’s chief economist, thinks the wet weather in the early part of spring may have delayed the usual seasonal surge.
He said: “The imminent change of guard at the Bank of England takes place against the backdrop of a modestly improving UK economy, albeit one that appears to rest upon a pick-up in consumer spending and a recovering housing market.
“Funding conditions, helped by the funding for lending scheme, continue to look favourable and are supporting more competitive mortgage pricing and availability and a gradual resumption of lenders’ risk appetite.
“While the direction of travel is clear and fits well with the more positive housing surveys from RICS and others, our forward estimate does imply somewhat stronger house purchase activity than we had been expecting. This may reflect a degree of pent up sales following the extended spell of poor weather earlier this year.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Recovery in the housing market is well underway.
“This comes as no surprise: finally, the pick-up in business that estate agents and mortgage brokers have been reporting since the start of the year is filtering through to the official figures.”
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