The number of remortgage loans issued by volume in May 2015 fell by 10% from April and 4% from May 2014 to stand at 22,700.
House purchase loans by volume fell by 15.8% year-on-year to 49,000 despite rising by 1.4% month-on-month.
Jeremy Duncombe, director, Legal & General Mortgage Club, said: “Activity in the housing market has failed to reach the levels anticipated at the start of the year and this picture is backed up by today’s CML data.
“One area where activity has been particularly slow is remortgaging. With many banks currently offering historically low interest rates to consumers now is great time for those coming to the end of their mortgage deal to look for a new rate.”
In the wake of the government’s decision to clamp down on buy-to-let taxes the market was found to have performed strongly in May, as the number of loans issued rose by 12% year-on-year and 1% month-on-month to reach 17,500.
First-time buyer lending also rose by 1% on a monthly basis and homemover volumes increased by 2%, however they dropped by 15% and 16% compared to May last year.
Paul Smee, director general of the CML, said: “House purchase lending in May was slightly up on the previous month, suggesting the market might be waking up after a subdued first quarter.
“Activity has broadly been down on last year but we expect it to rise in the summer months as, with historically low interest rates and a competitive lending environment, borrowing conditions are relatively favourable.
“But we cannot ignore the continuing affordability constraints caused by high house prices relative to earnings which will work in a contrary direction.”
On Friday the government unveiled plans to reform brownfield planning permissions by offering automatic planning permissions on brownfield sites.
Ben Thompson, managing director at estateagent4me.co.uk, hoped this is only the beginning. He said: “For lending to grow, we need a concentrated programme of house building. As it stands, we are in real danger of seeing buyers fall through the ever increasing gap between housing supply and demand.”
