Council of Mortgage Lenders: Mortgage lending up 7%

Amongst all the doom and gloom surrounding the housing market, it's a welcome change to come across a positive news story!

The Council of Mortgage Lenders today issued a press release, showing a considerable increase in gross mortgage lending in the UK. Their figures show a 7% increase for the month of May compared to April, and 10% compared to May of last year.

According to the CML, the mortgage market remains subdued, with turnover marginally below the figures seen at the end of 2009, and gross lending slightly under the CML's forecast of £150 billion for 2010.

CML economist Paul Samter commented: "The ground has been cleared for next week's budget to be the start of an austerity drive to get the public finances onto a more sustainable footing. We do not expect it to include housing and mortgage specific direct tax measures. But the market will inevitably be affected by how policy impacts on the wider economy - particularly on household finances and confidence,".

Should the mortgage market stagnate and lending levels decline sharply, it will be interesting to see which tools the BoE employs from its array of newly gained powers, to regulate and possibly ration the mortgage market.