CML figures showed that gross lending is up 7% from the £10.5bn in April and 10% up on May 2009’s £10.2bn.
Yet, the CML said the market remains subdued and turnover is below that seen at the end of 2009, despite being more buoyant than a year ago.
The CML said gross lending may undershoot its existing lending forecast of £150bn for 2010.
Paul Samter, CML economist, said: “The ground has been cleared for next week’s Budget to be the start of an austerity drive to get the public finances onto a more sustainable footing. We do not expect it to include housing and mortgage specific direct tax measures. But the market will inevitably be affected by how policy impacts on the wider economy, particularly on household finances and confidence.
“Financial sector regulation is a further source of uncertainty. The Chancellor has announced that the Bank of England is to take on regulatory responsibility for the banking system. As well as regulating individual firms, the Bank will have “macro prudential” powers and be accountable for the stability of the system as a whole. But it is not yet clear what levers it will have at its disposal to do so.”
