UK mortgage lending hits eight-month high in May

UK mortgage rose to an eight-month high in May, according to the Bank of England, while approvals also held up better than anticipated, indicating that the British housing market had shrugged off headwinds stemming from the ongoing cost-of-living crisis.

Mortgage lending increased to £7.4bn in May, the highest since September 2021, as banks approved 66,200 home loans, ahead of both April's print and estimates for a fall to 64,000.

The BoE data was in stark contrast to those from Nationwide Building Society and Zoopla, which suggested that higher interest rates had taken much of the steam out of the UK housing market.

The report also showed that property demand was still high throughout the month despite an increase in the effective interest rate on new mortgages, which rose 13 basis points to 1.95% - the highest level since June 2021.

Reporting by Iain Gilbert at Sharecast.com