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Mortgages in May Show Huge Increase

Written By On 21/06/2013

The Council of Mortgage Lenders announced the highest monthly lending numbers in the United Kingdom for over five years with a figure of £14.7 billion last month.

This is an increase of just over twenty per cent from April this year and seventeen per cent on the same month in 2012. This also reveals an eight per cent increase for gross lending from the start of January to the end of May compared to the same time last year.

The CML said that this is largely due to schemes that the government have put in place to help the property market and reduce mortgage repayments.

One they named in particular is the new government-backed Funding for Lending system that has been set up to help reduce the cost of borrowing. This is a financial scheme that involves the Bank of England offering lending institutions cheaper funds, providing they use it to offer loans to companies and individuals.

The Help to Buy scheme has also received encouraging signs according to the BOE, the CML and the Halifax building society. This particular system started two months ago and allows purchasers to give a deposit of no more than five per cent. This scheme is due to run until January 2014.

Bob Pannell from the CML, felt that poor weather conditions earlier this year may have been the reason why we never experienced the normal spring property buying activity. He commented,

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.

Many housing market reports are showing signs that properties are on the move again while some spokesmen within the sector feel that one month's major increase in figures does not call for anybody to get carried away just yet.