UK lenders group, the Council of Mortgage Lenders (CML), which is comprised of banks, building societies and other lenders, released figures today that reveal total gross mortgage advances in May 2013 reached GBP14.7bn, a rise of 21% compared to April this year and an increase of 17% over May 2012.
Members of the Council of Mortgage Lenders are responsible for approximately 95% of all residential mortgage lending in the UK and the group estimates that its latest monthly figures are the highest since October 2008.
Schemes such as the government’s Funding for Lending and Help To Buy equity loans are said to have boosted lending and helped bring down the cost of mortgages. Funding for Lending offers cheap funds from the Bank of England to banks and building societies, providing that the money is lent out to individuals and businesses, while the Help To Buy equity loan enables people to purchase a newly built home with at least 75% of the cost met by a mortgage and a deposit of at least 5% of the purchase price, with balance being paid for by the government through an equity loan.
Bob Pannell, chief economist for CML, commented: “Funding conditions, helped by the funding for lending scheme, continue to look favourable and are supporting more competitive mortgage pricing and availability and a gradual resumption of lenders’ risk appetite.
“While the direction of travel is clear and fits well with the more positive housing surveys from RICS and others, our forward estimate does imply somewhat stronger house purchase activity than we had been expecting. This may reflect a degree of pent up sales following the extended spell of poor weather earlier this year”.