The latest figures from the trade group also showed mortgage approvals last month increased by 3% compared to the same month a year earlier.
Increased approval numbers were driven by remortgaging, up 18% from a year earlier.
In contrast, approvals for house purchase were 3.8% lower than the same month last year.
Credit card spending was 2.3% higher in May than a year earlier, with outstanding levels of card borrowing having grown by 5.7% over the year.
Eric Leenders, managing director, personal finance at UK Finance, said: “May’s increase in mortgage approvals was driven by strong growth in remortgaging, as a large number of fixed-term mortgages came to an end and homeowners took advantage of a competitive market to shop around for attractive deals.
“Increased efforts by lenders to contact their customers before their current mortgage deal expires have also contributed to this rise.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “This is more of a spring bump rather than bounce as approvals for house purchases were lower at a time when we would have expected increased activity, even though gross lending is considerably higher, boosted by remortgaging.
“Many buyers and sellers are sitting on their hands and those that are recognising the new reality in this price-sensitive market are negotiating hard but transactions are taking longer as a result.”
