This is the highest monthly estimate for gross mortgage lending since October 2008.
Commenting, CML chief economist Bob Pannell said: “The imminent change of guard at the Bank of England takes place against the backdrop of a modestly improving UK economy, albeit one that appears to rest upon a pick-up in consumer spending and a recovering housing market.
“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.”
Ashley Brown, director of the independent mortgage broker Moneysprite, was much more positive: "The jitters have turned into a jog,” he said. “The mortgage market is no longer walking, but running back to health.
"For mortgage lending to surge by more than a fifth in a month is the best news we've seen in years.
"The Funding for Lending Scheme has clearly unblocked the credit pipeline - mortgage supply is strong and lenders are genuinely open for business once again.
"Help to Buy is stoking demand for newbuild properties and 95% LTV loans are not just available, but more importantly they are affordable again as lenders compete for business.
"But with inflation rising and the property market sliding in several parts of the country, some would-be buyers are still finding reasons to sit on their hands.
"It has been a long time coming, but the mortgage market is functioning again. The property market is still patchy, but both are a world away from the dysfunctional despair in which they spent so long."
However David Whittaker, managing director of Mortgages for Business, sounded a word of warning for the market. “The mortgage market is starting to fizz again," he said. "The Funding for Lending scheme has helped clear the credit bottleneck and is allowing banks cheaper access to credit, which they are allowing to flow to borrowers.
“Rates on first-time buyer mortgages are at record lows and lenders are more willing to lend to high LTV borrowers. Criteria have eased, and there are a wider range of mortgages for house purchasers to choose from.
“Most other areas of the economy haven’t been able to shake off the torpor induced by the financial crisis, but the mortgage market is beginning to and is at the vanguard of the UK’s economic recovery.
“A word of warning though: deposit requirements are still higher than they were prior to the banking crisis, and lenders are reluctant to fling open the doors to high LTV borrowers. Inflation is high, wage growth is low, and savings rates lower still.
“All those factors will make it hard for the recovery in lending to reach a higher level and get back to where it was prior to 2008.”
Mark Dyason, director, independent mortgage broker, Edinburgh Mortgage Advice, agreed: "May, make no mistake about it, was a humdinger for the mortgage market.
"However, the announcement by the Prudential Regulation Authority of a £27bn capital hole could have ramifications for lending volumes in the short to medium term.
"The banks can't have their capital cake and lend it. Something has to give and it may well be the higher loan-to-value borrower that loses out.
"Despite the rise in lending volumes, some bigger lenders are still not making enough of the Funding for Lending Scheme and the increased focus banks are under from the PRA means this could continue for some time yet.
"The mortgage market, driven by the first time buyer, is much improved relative to a year but we may be entering a plateau period within the market as the banks focus on getting their houses in order.
"While rates have improved dramatically, criteria remain a problem.
"Lenders are too often posting headline-grabbing rates at 60% LTV and then declining nine out of 10 cases at 90% LTV. When these borrowers have perfectly reasonable credit profiles, there is no justification for this.
"Lloyds being sold could also add some fresh impetus to the market. What we need now is for the banks to address their criteria at higher LTVs."
