Gross lending was £10.3bn in May compared with £10.5bn in April and £24.7bn in May 2008.
CML economist Paul Samter says: “Recent signs from the housing market have been more encouraging but we do not anticipate a significant recovery in activity in the coming months.
“Lending volumes appear to have stabilised at extremely low levels but the weak labour market and lenders’ limited access to funding will constrain activity for some time yet.” He says the moderate improvement in house purchase lending in May has been offset by very low remortgaging volumes as borrowers stay with existing deals.
The National Association of Estate Agents reports demand is outstripping supply, with estate agents registering four househunters to every available property. The average branch had 299 househunters in May, up from 265 in April and 247 in May 2008. Branches had 69 properties on their books and sold 10 properties, a 30 per cent rise on last year.