Mortgage lending stable as market ‘ticks along’
The figure was £600m higher than May 2016, when lending secured on homes was £2.9bn.
Mortgage approvals for house purchase remain broadly stable at 65,202, totalling £11.7bn, said the bank. This was the same value as in the previous month, which saw approvals of 65,051. In May 2016, approvals reached 66,722, however value was similar – £11.6bn.
Meanwhile approvals for remortgaging increased slightly to 42,955 with a value of £7.4bn, slightly down on the previous six-month average of £7.7bn. In May 2016 approvals for remortgaging were 42,855 – and £7.5bn.
Annual growth in consumer credit remained strong at 10.3% in May, below its November 2016 peak of 10.8%, but £1.7bn higher than in April.
Jonathan Harris, director of mortgage broker Anderson Harris, said the figures are a sign that the mortgage market is proving resilient. “While there is likely to be considerable uncertainty ahead as a result of the ongoing Brexit negotiations, the mortgage market appears to be shrugging these off and steadily ticking along,” he said.
“Approvals for house purchase are broadly stable although remortgaging continues to rise as borrowers take advantage of cheap fixed-rate mortgages in particular.
“However, with a reported third of all borrowers sat on their lender’s standard variable rate, there are still too many borrowers paying more than they need to. As speculation continues regarding the possibility of an interest rate rise, it may be that more borrowers are persuaded to take the plunge and secure a cheap deal before they miss out.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added that the figures tally with other reports of the market being fairly stable.
“However, we would have hoped for higher numbers compared with this time last year, considering that the market then was still suffering following the introduction of the Stamp Duty surcharge,” he said.
“Over the next few months, we expect the situation to remain fairly similar as buyers and sellers come to terms with the ‘new normal’ – longer transaction times and softening prices underpinned by a shortage of supply and insufficient housebuilding.”