Gross mortgage lending in the UK reached £18.2 billion in May, some 4% higher than April’s £17.6 billion and 14% higher than May 2015, the latest data shows.
The figure from the Council of Mortgage Lenders, which represents the vast majority of home lenders in the UK, was the highest May figure since 2008 when gross lending reached £23.7 billion.
CML senior economist Mohammad Jamei pointed out that, 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 European Union 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,’ he explained.
‘Market fundamentals underpinning house prices still look sound, and we do not expect significant house price falls, especially given the current supply demand imbalance,’ he added.
According to Adam Tyler, chief executive officer of the National Association of Commercial Finance Brokers (NACFB), a wait and see attitude and increased caution is likely among buyers and sellers alike due to the referendum result.
‘Our own view mirrors that of the Council of Mortgage Lenders in that market fundamentals still look sound and the sharp imbalance between supply and demand will prevent a material decline in prices,’ he said.
‘Sentiment may have shifted dramatically over the past few days but the structural imbalance between supply and demand is as strong as ever. Demand naturally tapered off in the buy to let sector following the stamp duty surcharge but it may experience a bounce after Friday’s referendum result,’ he explained.
He also pointed out that current market, political and economic volatility could benefit buy to let as investors once again look to bricks and mortar as a safe investment and the fact that Bank Rate is now more likely to go down than up in the near term will provide further support to the property market.
‘Understandably, there’s a lot of hysteria surrounding the trajectory of the property market but our own view is that the reality will prove to be relatively benign,’ he added.