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Last Updated: Tuesday, 20 June 2006, 09:34 GMT 10:34 UK
May sees bumper mortgage lending
Detached house
Demand for mortgages is very strong, lenders say
Gross mortgage lending reached 28.7bn in May, the second-highest monthly figure on record, according to the Council of Mortgage Lenders (CML).

Lending was 18% higher than in April and nearly 30% higher than in May 2005.

The CML said lending was buoyed by a strong London property market and consumer confidence.

Meanwhile, figures from Building Society Association (BSA) and British Bankers' Association (BBA) also indicated May saw high lending levels.

Lending has hit record levels in six of the last eight months supported by the strength of the London market, interest in higher priced properties, and strong consumer confidence
Michael Coogan, CML director general

The BSA described May's mortgage market as "exceptionally strong", with the highest lending figure for any month since records began in May 1987.

Likewise, the BBA said that mortgage lending was at its highest for more than two years.

Strengthening

Lending is typically higher in May than in April, as house buying strengthens during the spring months. However, even taking into account seasonal factors the rise in lending in May was very strong, the CML said.

"The recent lending market has been consistently strong. Lending has hit record levels in six of the last eight months supported by the strength of the London market, interest in higher-priced properties, and strong consumer confidence," said Michael Coogan, CML director general.

The CML predicted that demand for mortgages will start to moderate later this year, a view shared by the BSA.

Mr Coogan added that June's mortgage lending figure may well be affected by would-be house buyers putting off viewings to watch world cup matches.

Recent housing market surveys from the Halifax and Nationwide have showed house price growth slowing slightly, in response, experts suggest, to rising utility bills and fears over future interest rate rises.




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