Mortgage lending in May hit its highest level since Council of Mortgage
Lenders' records began in 1998.
The increasingly buoyant housing market meant total gross mortgage lending
went up to £12.9bn last month from £11.6bn in April and
£10.1bn in May 2000.
Lending for house purchase by both banks and building societies rose to
£8.1bn from £7.4bn in April and £6.6bn last May.
Remortgaging recovered from a slight dip last month to reach £3.9bn in
May from £3.4bn in April and £3bn last May.
Following the Bank of England's base rate cut in May, average new variable
rates fell to 5.32 per cent from 5.53 per cent in April, with average
new fixed rates down to 5.95 per cent from 5.99 per cent. Seventy per cent
of loans taken out in May were on a variablerate basis.
The number of loans for house purchase rose to 106,000 from 96,000 in
April, with first-time buyers borr-owing an average of 81 per cent of the
value of the property from 79 per cent,at an average of 2.41 times their
income from 2.25 the previous month.
CML director general Michael Coogan says: “The popularity of spring and
summer as the season for housebuying explains much of the reason why
lending rose to its highest-ever level in May.
“But the wider picture of buoyant household confidence and spending may
mean the monetary policy committee's next move in interest rates is