Double digit boost in mortgage lending in May
This marks a 12% increase on both April 2017 and on May last year, when £17.9bn was lent to borrowers.
CML director general Paul Smee said: “Remortgage activity and first-time buyers continue to drive lending this year. Looking ahead, we expect to see this trend continue, but not as strongly, as the factors supporting lending are blunted by less favourable economic conditions.”
Henry Woodcock, principal mortgage consultant at IRESS, added: “Although 2017 has been unusual with both a snap general election, and the start of Brexit negotiations in earnest, the market continues to show resilience with a month-on-month increase in gross lending.
“Recently Mark Carney, the Bank of England governor, has said although inflation is rising and there is, ‘anaemic wage growth’; now is not the time to increase rates. After reduced home buyer activity in April, this is positive news for the market.”
Buy-to-let prediction revised downwards
Despite the robust lending figures, the CML has revised its buy-to-let forecast for 2017 and 2018 down from previous expectations at the end of last year. The trade body now expects buy-to-let lending of £35bn in 2017 and £33bn in 2018, a decrease from the £38bn it had previously forecast for each year.
Smee explained the decision: “Buy-to-let had a weak start to 2017, and the sector’s contribution to overall net mortgage lending has fallen considerably over the last year.
“Following the distortion of the stamp duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.”