The latest figures from the Council of Mortgage Lenders (CML) estimate that gross mortgage lending was £18.2 billion in May.
This figure is 14% higher than the £16bn recorded in May last year and is the highest May figure since 2008 when the CML recorded gross mortgage lending as £23.7bn.
The CML’s Market Commentary for June 2016 further highlights that the Brexit outcome of the EU Referendum will ‘weigh on housing market activity over the next few months’, citing a possible wait and see attitude of buyers and sellers as the reason behind this.
As house purchase activity is deferred, the council believes that lending will be driven by remortgage customers.
It also states that the Bank of England governor’s statement following the referendum result, makes it unlikely that a rate rise is on the cards.
Instead, a rate cut may be more likely if the economy falters as a reaction to post-referendum uncertainty.
Mohammad Jamei, senior economist, CML said: “As expected, lending continued to be somewhat dampened in May, reflecting the earlier rush in the first quarter to beat the stamp duty change on second properties.
“Looking ahead, there is likely to be considerable uncertainty as a result of the EU referendum decision. We expect this to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait-and-see attitude until the dust begins to settle.
“Market fundamentals underpinning house prices still look sound, and we do not expect significant house price falls, especially given the current supply demand imbalance.”
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28th June 2016