House purchase lending boost
Overall house purchase lending was also up 8% year on year in May, totalling £9.4bn.
First-time buyers borrowed £4.3bn of that sum, up 10% on April and 23% on May last year, while home movers accounted for £5.1bn, up 19% on April but down 2% compared to a year ago. This represented 26,300 loans, up 18% month-on-month but down 5% on May 2015.
Remortgage activity totalled £5.2bn, down 15% on April but up 30% compared to a year ago.
Landlords borrowed £2.6bn, up 4% month-on-month but down 4% year-on-year.
Paul Smee, director general of the Council of Mortgage Lenders, commented: “There was a sense of the market regaining some equilibrium in May, following the stamp duty driven spike in March and the subsequent dip in April.
“Brexit, and its likely effect on the market, is a question to which the answer will not immediately be forthcoming. Lenders will continue to be open for business as usual, but lending volumes may be affected by uncertain consumer sentiment.”
The trade body said that affordability for first-time buyers has remained relatively stable with the average loan size increasing to £131,000 from £130,000 in April, while the household income of borrowers also increasing slightly from £39,700 in April to £40,000 in May. This meant that the average first-time buyer income multiple went up from 3.46 to 3.51.
Home movers showed a similar trend with the average amount borrowed increasing to £166,000 from £163,000 in April, and the average household income of a home mover also increasing to £53,300 from £52,500. This meant the income multiple went down from 3.26 to 3.25 month-on-month.