20/06/2006

May mortgage lending 'second highest on record'

Gross mortgage lending reached £28.7 billion in May - the second-highest monthly figure on record - according to the Council of Mortgage Lenders.

Lending was 18% higher than in April and nearly 30% higher than in May last year.

The CML said that it was the strongest May figure on record and only 0.5% below the record for a single month - £28.9 billion - which was seen in July 2004.

The CML said that lending was typically higher in May than in April, as house buying strengthens during the spring months. However, even taking into account seasonal factors and the impact of the Easter break on last month's figures, the CML said that the rise in lending in May was very strong.

Commenting on the figures, CML Director Michael Coogan said: "The recent lending market has been consistently strong. Lending has hit record levels in six of the last eight months supported by the strength of the London market, interest in higher priced properties and strong consumer confidence.

"We expect demand to moderate later this year, but it looks set to stay robust for the immediate future - although property viewings might be affected by World Cup fever."

Figures released by the Building Societies Association (BSA) and British Bankers' Association (BBA) also showed high levels of mortgage lending in May.

Adrian Coles, Director-General of the Building Societies Association, said that the mortgage market last month was "exceptionally strong", with total lending at the highest May figure since records began in 1987.

He said: "It is reasonable to assume the housing market will be buoyant going into the summer. It has been widely predicted that the market will show signs of cooling, but this is not likely to happen until the autumn."

David Dooks, BBA Director of Statistics, said: "May's rise in net mortgage lending, the largest monthly increase since the rise of £6 billion in April two years ago, shows the mortgage market to be very much at a time when annual house price growth is strengthening."

(KMcA/SP)

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