Mortgage lending rose in May, says CML

12 July 2010

Written by Michael Aglony

Mortgage lending saw a modest increase in May, the Council of Mortgage Lenders (CML) has reported, while those purchasing property have typically spent the lowest proportion of their income on home loans in 35 years.

Compared with April, the amount borrowed to buy houses rose by three per cent, while the number of deals approved was two per cent higher.

As many as 15 per cent more mortgages were lent in May compared with the same point in 2009, while the total value of the loans increased by 28 per cent, the CML stated.

This indicates that borrowing has risen for the 11th month in a row, although the body warned that the trend is likely to be curtailed later in the year due to government spending cuts and tax hikes.

Michael Coogan, director-general of the organisation, commented: "Our forecast for gross lending in 2010 may now be looking a little optimistic."

Statistics from the Bank of England support the data from the CML, showing a rise in net mortgage borrowing of £1.2 billion in May, up from £1 billion in April.

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