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Gross lending bounced back in May

Gross mortgage lending rose 12% in May compared with April, Council of Mortgage Lenders figures show.

Gross lending totalled an estimated £11.3bn in May, up from the £10.1bn lent in April and 1% higher than in May 2010.

The increase represents a bounce back after a 14% drop in April which has been blamed on the royal wedding and Easter holidays.

Michael Coogan, director-general of the CML, says: “Gross mortgage lending in May recovered after low activity in April. Distorting effects from Easter and bank holidays cloud the picture, but the likelihood seems to be flat lending in the next couple of months.”

Jonathan Samuels, chief executive officer of Dragonfly Property Finance, says competition and appetite among lenders is returning but they are still conservative and borrowers are anxious about buying in the current climate.

He says: “It could be some time yet before the market reaches pre-2007 activity levels. The CML expects flat lending for the next couple of months but realistically lending activity looks set to remain flat for the next couple of years, just as it has been over the past year.”

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