Gross mortgage lending up by 25%, says CML

May's gross mortgage lending for UK property was an estimated £12.2 billion, up by 24 per cent on April's figure of £9.9 billion, according to the Council for Mortgage Lenders (CML).

Furthermore, last month's lending was a 13 per cent rise from May 2011 (£10.8 billion), but down on March's £12.6 billion.

Bob Pannell, chief economist at the CML, said that the government has recently announced a number of measures to counter the adverse effects from the Eurozone crisis as it senses an opportunity to bolster home ownership and housing activity.

"Meanwhile, mortgage lending continues to seesaw, albeit against a broadly flat market. Unfortunately, a number of one-off factors, such as the Diamond Jubilee and the Olympics, are set to distort market indicators over the coming months, and it may be the autumn before we can more accurately gauge the state of the market," Mr Pannell stated.

The economist went on to say that the pattern of housing transactions has been distorted by the ending of the stamp duty concession towards the end of March.

This led to property sales falling back by more than a quarter in the following month after positive figures in March.

Mr Pannell noted the eurozone crisis was having an effect on the uncertainty surrounding short-term economic prospects.

The recent bailout of Spanish banks and the Greece election results were providing "the briefest of reprieves".
This all has a knock-on in the UK, "triggering a significant change in the mood music".

Commenting on recently-announced figures for house purchase lending in April, director general of the CML Paul Smee, said: "April's figures show the expected effect of the end of the stamp duty concession on UK mortgage lending. Given the economic uncertainty, any significant pick up in lending in the coming months seems unlikely."

Despite this, aspiration of owning property still remains high, with eight out of ten people dreaming of being able to have the keys to their own home, ensuring that there is still a clear long-term demand.