Gross mortgage lending of £12.2bn in May was 24% up on April’s £9.9bn, taking this year’s gross lending so far up to £55.7bn.
The industry is widely expected to lend £130bn this year, which would mean gross lending would have to offer about £10.6bn a month for the rest of the year.
Bob Pannell, chief economist at the Council of Mortgage Lenders, says it will not be able to make a more accurate assessment of the market until the autumn.
He says: “The government has recently announced a number of measures to counter the adverse effects from the eurozone crisis.
“It clearly senses an opportunity to bolster home ownership and housing activity, and we look forward to hearing more about the funding for lending initiative, which seeks to deliver this.
“Meanwhile, mortgage lending continues to seesaw, albeit against a broadly flat market.
“Unfortunately, a number of one-off factors, such as the Diamond Jubilee and the Olympics, are set to distort market indicators over the coming months, and it may be the autumn before we can more accurately gauge the state of the market.”
David Brown, commercial director of LSL Property Services, says if the Bank’s funding for lending scheme is a success, banks could increase their lending substantially in the coming months.
He says: “The number of first-time buyers able to get on the property ladder has been bumping along the bottom since the first crunch and has boosted tenant competition, but if the new funding for lending scheme is a success, this could well improve in the second half of the year.”