Mortgage lending rose by 12% in May

Mortgage lending rose by 12% in May as demand recovered following a run of bank holidays and the royal wedding the previous month, figures showed today.

A total of £11.3 billion was advanced during the month, up from £10.1 billion in April, and also 1% higher than a year ago, according to the Council of Mortgage Lenders (CML).

However, lending for buying homes was down on a year ago, with the increase being accounted for by remortgaging.

CML director general Michael Coogan expects demand for remortgages to fall in the coming months after the Bank of England again opted to keep interest rates at their record low of 0.5% and as expectations of an imminent hike recede.

As a result, he expects lending levels to remain essentially flat over the next couple of months, he added.