A report by the trade association said that mortgage lending reached an estimated £12.2bn during May. This figure is a 24% rise from the £9.9bn recorded in April.
April’s figures had been significantly down on the previous month, following the end of the Stamp Duty exemption period.
Figures in May recovered strongly and are 13% up on the same period last year.
CML chief economist Bob Pannell was pleased with the results but warned sporting events during the summer could distort the market until the autumn.
“The government has recently announced a number of measures to counter the adverse effects from the Eurozone crisis.
“It clearly senses an opportunity to bolster home ownership and housing activity, and we look forward to hearing more details about the ‘funding for lending’ initiative which seeks to deliver this.
“Meanwhile, mortgage lending continues to seesaw, albeit against a broadly flat market.
“Unfortunately, a number of one-off factors, such as the Diamond Jubilee and the Olympics, are set to distort market indicators over the coming months, and it may be the autumn before we can more accurately gauge the state of the market.”
Russell Quirk, founder of emoov.co.uk, added: “At first glance, such a big big month-on-month jump in lending should set the doom-mongers sobbing into their cornflakes.
“With mortgage advances and house prices intrinsically linked, such healthy growth appears very encouraging for the market as a whole.
“But the figure is flattered somewhat by the fact that lending in April was very low, after many first-time buyers rushed to complete before the end of the stamp duty holiday at the end of March.”
Jonathan Samuels, CEO at Dragonfly Property Finance, said: “This sharp upwards spike doesn’t signify the return of the mortgage market, just a return to historically low activity levels. Only buy-to-let is showing any genuine signs of life.
“The owner-occupier mortgage market remains lacklustre, due to ongoing weakness in demand and a now inveterate conservatism among the high street lenders.
“Falling inflation is a rare positive for the consumer but it’s nowhere near enough to make people commit to a home purchase. You need confidence to do that and confidence is in short supply.”
Paul Hunt, managing director at Phoebus Software, commented: “In a year in which a European nation has partially defaulted and appeared set to leave the eurozone altogether and in which the UK slid back into recession, that mortgage lenders have managed to achieve a substantial increase in their activity is testament to the innovative and proactive approach they have taken.
“In spite of the absence of economic growth and amid growing fiscal hurdles in the property market, the lending industry has found a way to sustainably and significantly boost activity in the property market.”
