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Highest May mortgage lending in 8 years but housing market uncertainty ahead

Written by: Christina Hoghton
Mortgage lending has risen for the month of May, but the Council of Mortgage Lenders said the results of the EU referendum will weigh on housing market activity over the next few months.

Mortgage lending reached an estimated £18.2bn in May, according to The Council of Mortgage Lenders (CML) which is stronger than expected.

This is a slight 4% rise on last month, and 14% higher than a year ago (May 2015 – £16bn). It’s also the highest level of lending in May since 2008 (£23.7bn).

But CML’s senior economist Mohammad Jamei warned of uncertainty ahead, following last week’s EU Referendum result.

He said: “Looking ahead, there is likely to be considerable uncertainty as a result of the EU referendum decision.

“We expect this to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait-and-see attitude until the dust begins to settle.

“Market fundamentals underpinning house prices still look sound, and we do not expect significant house price falls, especially given the current supply demand imbalance.”

Jamei added that lending over the next few months is likely to be driven by remortgage customers, as house purchase activity takes a back seat.

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