Lending volumes for house purchase rose 36% between April and May to £7.2bn, a rise of 29% year-on-year, while lending for remortgaging was boosted by 11% over the month to £3.5bn. The number of loans made for purchase rose 33% to May.
Despite the monthly gain, remortgage figures were 8% down on the same period last year.
Worries about a collapse in first-time buyer sales were unfounded as figures bounced back from a poor April, rising from 12,700 to 18,100. This year to date, first-time buyer activity has remained relatively similar to figures posted in the second half of last year.
The total number of transactions grew for both mortgages and remortgages, rising to 48,300 for purchases and 27,900 for remortgages.
The average loan size for first-timers also returned to normal levels in May, rising from a low of £97,750 in April back up to £104,000 in May. First-time buyers borrowed an average of 3.21 times their income.
Paul Smee, director-general of the CML, commented: “It is positive news for the market that the slump following the end of the Stamp Duty concession seems to have been short-lived.
“Lending is similar to late 2011 levels and showing a healthy improvement on the same time last year.”
Charles Haresnape, managing director, Aldermore Residential Mortgages, said: “It’s good news that ending the stamp duty concession appears not to have held first time buyers back permanently. However, first time buyers still need as much support as possible and it will be good to see more lenders participating in NewBuy and offering schemes to help borrowers struggling to find a deposit.”
Smee added 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.”
