Gross mortgage lending was an estimated £16.5 billion in May, according to the Council of Mortgage Lenders (CML).
This is the same as April’s gross lending total and is 12% higher than May last year (£14.8 billion).
CML chief economist Bob Pannell said: “Market indicators point to a slowdown in activity levels, in part associated with new mortgage rules, but it is unclear how lasting this will be.
“Implementation of the new regulatory regime is likely to have disrupted the normal patterns of activity, creating statistical ‘fog’ around the published figures. As this lifts over the coming months, a clearer picture as to any lasting impact of the MMR rules on lending activity should emerge.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The lending market is holding steady with May lending volumes identical to April’s and 12 per cent higher than May last year. It is still not clear how much of an impact the mortgage market review rules are having on the market and how much of the slowdown is to do with buyers questioning the prices some vendors are demanding.
“The threat of an interest rate rise is bound to be having an impact on people’s inclination to take on new debt. Mark Carney’s Mansion House speech sent Swap rates soaring as the markets factor in a rate rise earlier than expected and before the end of this year. However, inflation has fallen again suggesting that the urgency for a rate rise has once again diminished.
“While it still looks as though the first rate rise won’t come before the middle of next year at the earliest, fixed-rate mortgages are becoming more expensive, and will continue to do so. However, borrowers shouldn’t panic as five-year fixes are still available for a little over 3% – historically, an excellent rate. Borrowers might want to secure a fix now though if they need certainty rather than waiting several months to see what happens. Ultimately, there is only one way for interest rates to move and that’s upwards – it’s a question of when this will happen.”