This continues the anticipated seasonal uplift in lending. Although this figure represents a 7% fall from the £24.1 billion lent in May 2004, this year on year reduction is less than in previous months.
Lending for house purchase in May increased by 8% to £9.9 billion, compared to £9.2 billion in April. At the beginning of the year, monthly lending for house purchase was at its lowest level since March 2002 (£6.9 billion). This month total lending is 44% higher than in January, so house purchase remains a significant part of the market.
The breakdown of lending in proportionate terms remained virtually unchanged in May. Lending for house purchase accounted for 44% of all lending, against 43% in April. Within lending for house purchase, the proportions of loans going to first-time buyers (31%) and movers (69%) were almost unchanged from April.
Remortgaging fell for the fifth consecutive month, from £9.4 billion in April to £9.3 billion. Remortgaging as a proportion of total of lending also fell, from 43% in April to 42% in May.
The typical rates charged for loans have decreased slowly but steadily throughout 2005, for both fixed and variable-rate products. Fixed-rate loans accounted for 44% of all loans, which was the highest take-up rate since July 2003.
Commenting on the latest figures, CML Director General Michael Coogan said: "In recent months, some commentators have been predicting that the housing market is facing an imminent "crash". However, if interest rates have peaked, as we believe, this outcome is highly unlikely. In recent months the housing market has been stable, but slowing compared to the record figures of 2004. We expect this to continue, even if the rate of annual house price growth continues to fall."
