The figures showed that mortgage approvals – loans agreed but not yet made – in May had risen to 67,702 from 67,290 in April.
May experienced the highest level of loans for house prices for ten months. Net lending for the month rose by £4.3 billion, £300 million higher than the previous month, and gross mortgage lending was £14.3 billion – 2 per cent higher than in April.
However when compared to last year the market’s performance has worsened and fallen way below historical levels. Mortgage approvals have fallen by almost a quarter from 89,289 in May 2004.
In terms of value, mortgage lending fell 17 per cent compared with last year and gross lending was 8 per cent lower, reviving fears that the market may still suffer a sharp downturn. A view rebuked by industry figures.
David Dooks, director of statistics at the BBA, said: “While mortgage lending was slightly stronger in May, it is noticeable that all measures were below comparable data for a year earlier when May was a relatively weak month.
“Levels of loan approvals fluctuate with seasonal patterns but the volumes we are seeing suggest that a fairly stable lending picture will continue in the near-term.”
Ray Boulger, senior technical manager at John Charcol, agreed: “The rise in mortgage approvals doesn’t tell you anything bullish but it does tell you that the market is ticking along.
“There’s no indication of a full collapse or a roar ahead. House prices are still soft and it’s still a buyers market but properly-priced property is selling and the market should be restored by the Base Rate falling in the not too distant future.”
