The home-buying activity in the UK continues to remain buoyant with mortgage lending increasing by 16 per cent annually in May 2017. On a month-on-month basis, the mortgage activity increased by 10 per cent.
Data published by the Council of Mortgage Lenders (CML) showed that home buyers borrowed £10.8bn, equating to 58,400 loans. Interestingly, first-time buyers continue to account for a sizeable chunk of the borrowers. They borrowed £4.7bn, up 12 per cent both on last month and on May 2016. They took out 29,200 loans, up 13 per cent month-on-month and 8 per cent year-on-year.
According to the CML, it expects home buying activity to continue in the summer months with an even split between first-time buyers and home movers but in greater numbers than in the winter months. However, it has predicted buy-to-let sector to remain subdued compared to its recent 2015 peak.
While home-owner remortgage activity was up 10 per cent by value, compared to a year ago, remortgage lending was up 12 per cent by value. Gross buy-to-let totalled £2.9bn in May, up 16 per cent on April and 12 per cent compared to May last year. This equated to 19,100 loans, a 16 per cent increase on April and 15 per cent on a year ago.
Paul Smee, Head of Mortgages at UK Finance, commented: The apparent strong growth in mortgage lending in May might flatter to deceive. The relative weakness in lending last May following the stamp duty changes makes comparisons misleading.