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| UK mortgage lending up by a fifth, says lenders' group | UK mortgage lending up by a fifth, says lenders' group |
| (35 minutes later) | |
| UK mortgage lending surged to its highest monthly level since October 2008 in May, with activity even surprising lenders. | UK mortgage lending surged to its highest monthly level since October 2008 in May, with activity even surprising lenders. |
| Figures from the Council of Mortgage Lenders (CML) recorded gross mortgage lending of £14.7bn in May. | Figures from the Council of Mortgage Lenders (CML) recorded gross mortgage lending of £14.7bn in May. |
| This was up 21% on the previous month and 17% higher than in May last year, assisted by government schemes to boost the market. | This was up 21% on the previous month and 17% higher than in May last year, assisted by government schemes to boost the market. |
| The data comes shortly after building societies warned of a price "bubble". | The data comes shortly after building societies warned of a price "bubble". |
| Bob Pannell, chief economist at the CML, said that the wet weather may have delayed the usual spring bounce in housing market activity, when buyers head out to view homes. | Bob Pannell, chief economist at the CML, said that the wet weather may have delayed the usual spring bounce in housing market activity, when buyers head out to view homes. |
| "Our forward estimate does imply somewhat stronger house purchase activity than we had been expecting. This may reflect a degree of pent up sales following the extended spell of poor weather earlier this year," he said. | "Our forward estimate does imply somewhat stronger house purchase activity than we had been expecting. This may reflect a degree of pent up sales following the extended spell of poor weather earlier this year," he said. |
| 'Recovery underway' | |
| The figures only show a big leap in one month, which does not necessarily mark a shifting trend. | |
| However, a number of housing market reports have suggested a pick-up in activity, and commentators say this echoes rising interest from buyers since the start of the year. | |
| "Recovery in the housing market is well underway," said Mark Harris, chief executive of mortgage broker SPF Private Clients. | |
| "This comes as no surprise: finally, the pick-up in business that estate agents and mortgage brokers have been reporting since the start of the year is filtering through to the official figures." | |
| The CML said that house purchases had picked up, and pointed to schemes such as Funding for Lending for bringing down the cost of mortgages. | |
| The government-backed scheme offers cheap funds from the Bank of England to banks and building societies under the proviso that the money is lent out to individuals and businesses. | |
| The Bank of England, the CML, and major lender the Halifax have also reported an "encouraging start" to the Help to Buy scheme. | |
| Its first phase, which started in April, allows buyers to take out an equity loan with the government, which enables them to put down a deposit of just 5%. The scheme will be extended in January. | |
| However, earlier this week, the Building Societies Association warned of the danger of a house price bubble, unless the government had an exit strategy for the scheme. |