GAGE lending jumped sharply in May, rebounding from a weak figure in April and showing solid growth on the year, according to industry data published yesterday.
However, analysts warned the overall level of lending is still well below that seen in the pre-crisis years, and said banks are facing regulatory pressures holding back the market.
Gross mortgage lending rose to £12.2bn in May, the Council of Mortgage Lenders (CML) revealed yesterday.
That represents a 24 per cent rise on the month – in part because April’s lending was depressed after first time buyers rushed to take advantage of the stamp duty holiday which expired at the end of March, shifting some lending forwards by a month.
But the rise was still substantial on a longer-term basis – lending is up 13 per cent from the £10.8bn recorded in May of last year.
“This sharp upwards spike does not 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,” said Jonathan Samuels from Dragonfly Property Finance.
“The owner-occupier mortgage market remains lacklustre, due to ongoing weakness in demand and a now inveterate conservatism among the high street lenders.”
However, CML economist Bob Pannell argued new government plans to boost the economy could help mortgage lending over the rest of the year.