House purchase approvals last month reached 67,042, increasing by 1.3% on the previous month’s transaction levels of 66,205, but still remaining 5% lower than March. Looking back to May in 2015, lenders agreed 4% fewer loans at 64,447.
David Whittaker, managing director of Mortgages for Business, said: “Back in the first quarter, changes to Stamp Duty were the big story for UK property. Investors’ desire to complete before the April 1 deadline meant that business was brought forward into February and March, which then resulted in dampened approval figures for April.
“However, following this, it is now clear that the number of purchase approvals did increase between April and May, as property investors came to terms with the new normal this tax year.”
Remortgage approvals in May this year rounded the month on 42,919 transactions, 5% more than the previous month. Year-on-year remortgage approvals rose by 18%.
Total lending in May ended the month on £18.9bn, down 1.2% on April and 31% lower than March’s lending levels, when lending reached £27.3bn. Year-on-year, total gross lending for May rose by 11% from £17.1bn.
Whittaker said following the Brexit vote, anecdotal evidence suggested that many were holding off on transactions until a more detailed picture of the economic and political fallout emerges, which could make for a quieter third quarter.
He added: “Beyond the next six months or even the next few years of negotiations with the EU, the fundamentals of the British housing market will remain. Ultimately, high levels of demand for rental accommodation will continue to make property an attractive investment provided strategies take into account tax changes and possible changes to interest rates.”
