The Council of Mortgage Lenders (CML) has estimated that gross mortgage lending reached £18.2 billion in May.
Lending was 4% higher than April (£17.6 billion), and 14% higher than May 2015 (£16 billion), and the highest May figure since 2008 when gross lending reached £23.7 billion.
Mohammad Jamei, CML senior economist, said: “As expected, lending continued to be somewhat dampened in May, reflecting the earlier rush in the first quarter to beat the stamp duty change on second properties.
“Looking ahead, there is likely to be considerable uncertainty as a result of the EU referendum decision. We expect this to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait-and-see attitude until the dust begins to settle.
“Market fundamentals underpinning house prices still look sound, and we do not expect significant house price falls, especially given the current supply demand imbalance.”
Richard Pike, Phoebus Software sales and marketing director, added: “We should not be surprised at the figures estimated by the CML for gross lending today. Firstly, it was after all only the second month after the huge increase in lending in March, which pushed through transactions that may otherwise have made their way into April or May’s ‘normal’ activity. Secondly, it’s hard to ignore the impact of the EU referendum; there were obvious signs of caution before the vote, and we are most certainly heading into a period of greater uncertainty.
“There are so many variables, but in general it is likely that people will hunker down for the next few months, wait to see how the land lies and how the country manages its exit from the EU before making any big decisions. Many will also have to take stock to understand how the fall in the stock market affects their investments and pensions, which may also have a knock on effect on the housing market.
“The main thing now is that we need to get on an even keel as quickly as possible to bring some kind of stability across the country. Something I fear may take longer than any of us would like.”
