Gross mortgage lending recovers lost ground in May

Gross mortgage lending totalled an estimated £11.3 billion in May, according to new data from the Council of Mortgage Lenders.

This represented a 12% increase from the £10.1 billion lent in April and was 1% higher than in May 2010.

Gross mortgage lending includes lending for both house purchase and remortgage. Despite a modest pick-up in overall lending activity during May, lending for house purchase is running below year earlier levels - as April Bank of England approvals data indicate.

Looking ahead, interest in remortgaging is now also likely to be less pronounced, as expectations of higher interest rates this year recede. The MPC once again kept rates unchanged at its June meeting - for the 27th successive month.

CML director general Michael Coogan comments: "Gross mortgage lending in May recovered after low activity levels in April. Distorting effects from Easter and bank holidays cloud the current picture, but the likelihood seems to be for essentially flat levels of lending over the next couple of months."