The Council of Mortgage Lenders have estimated that total gross mortgage lending rose 21 per cent month-on-month and 17 per cent year-on-year in May 2013 to £14.7bn. This is the highest monthly estimate for lending since October 2008.
Commenting on market conditions, CML chief economist Bob Pannell said:
The imminent change of guard at the Bank of England takes place against the backdrop of a modestly improving UK economy, albeit one that appears to rest upon a pick-up in consumer spending and a recovering housing market.
Funding conditions, helped by the funding for lending scheme, continue to look favourable and are supporting more competitive mortgage pricing and availability and a gradual resumption of lenders’ risk appetite.
While the direction of travel is clear and fits well with the more positive housing surveys from RICS and others, our forward estimate does imply somewhat stronger house purchase activity than we had been expecting. This may reflect a degree of pent up sales following the extended spell of poor weather earlier this year.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says that the news comes as no surprise – the pick-up of business being reported by estate agents and mortgage brokers is now starting to be seen in official figures, and rates are falling accordingly.
It is not just rates that are falling - lenders are crucially also loosening criteria. Practically every move made by lenders in the past few months has been positive, either in terms of pricing, criteria or both. This will also help boost remortgaging numbers in coming months, which are already showing sings of improvement.