The CML said that monthly comparisons with last year are likely to be near zero or slightly negative over the coming months, due to the improving market seen in the second half of 2009 as the Stamp Duty holiday ended.
CML figures showed that homemovers continue to benefit the most from low interest rates with interest payments accounting for only 9.5% of their income in May, down from 9.6% in April and 11.4% on May 2009.
It also revealed that house purchase lending rose for the 11th consecutive month, albeit modestly.
The 42,000 loans worth £6bn were up 2% in volume and 3% in value on April, and 15% in volume and 28% in value from a year earlier.
In addition, remortgaging activity recovered slightly in May, with 26,000 loans worth £3.2bn, up 6% by volume and 10% by value on May, but down 14% by volume and by value on a year earlier.
First-time buyer figures showed marginal changes, with 14,800 loans worth £1.8bn advanced to first-time buyers in May, up from 14,500 worth £1.7bn in April and 13,700 worth 1.5bn in April 2009.
In May, first-time buyers borrowed an average of 3.14 times their income and 75% of the value of their property but interest payments accounted for only 13.2% of their income, the lowest amount since the 13% of March 2004.
The numbers of home movers increased marginally as well in May. The 27,100 loans worth £4.2bn were up from 26,500 worth £4.1bn in April and 22,800 worth £3.2bn in May 2009.
Michael Coogan, director-general of the CML, said: “House purchase lending continues its recovery but positive comparisons with equivalent months a year ago look unlikely to continue. Activity picked up in the second half of 2009 due to the Stamp Duty holiday but with the government’s austerity drive picking up momentum we are unlikely to see a repeat of those buoyant numbers this year. Our forecast for gross lending in 2010 may now be looking a little optimistic.”
