The number of mortgages for house purchase in May reached the highest level in almost three years, the latest figures from UK Finance have shown.
Approvals for house purchase were close to 50,000 in May, an increase of 9.1 per cent compared to a year earlier and the highest level since June 2016.
But remortgage numbers dropped back by 3.7 per cent to 30,579 in May compared to the same time last year.
Gross lending was £21.9bn, down by 0.4 per cent on May 2018.
Phoebus Software sales and marketing director Richard Pike says: “It appears the market is moving again despite the ongoing political turmoil in the UK.”
But he warns that the industry must keep a close eye on credit card spending, which was up by 5.6 per cent to £11.3bn in May.
Pike questions whether borrowers may be using credit cards to help keep up repayments on other debts.
He says: “We must not only consider levels of debt but future affordability if credit card spending keeps increasing.”
Just Mortgages and Spicerhaart national operations director John Phillips says: “We knew there had to be a change at some point, as all those people who had been delaying buying because if Brexit would eventually decide to make a move, and now we can see that change has happened, with home purchase approvals at their highest level since June 2016, which is just after the referendum.
“And I hate to say it, but I think this is about Brexit.
“The deadline for leaving Europe has already been delayed until October 31, and in all likelihood – thanks to a change in Prime Minister between now and then – will be delayed again.
“House prices are relatively steady, rates are still low and incentives like Help to Buy are still in place, so now is a good time to buy.
“Plus, of course, home purchase always spikes over the summer so I think we will see levels rise further going into the next few months.”
SPF Private Clients chief executive Mark Harris says: ‘The increase in mortgages for home purchase, rising to the highest level in three years, is hugely encouraging when you consider the political uncertainty which is causing many people to put decisions to move on hold.
“It suggests a much more resilient market than one might expect, and once a decision is made over Brexit, one way or another, we are likely to see a further uptick in transactions as pent-up demand is released.”