The Council of Mortgage Lenders (CML) believes a ‘modest recovery’ is underway despite lending shrinking again in May. The trade body estimates £16.2bn was lent last month, which is 3% lower than the amount lent 12 months ago.

In the first five months of 2015, March was the only month where lending rose year-on-year and on a monthly basis, lending increased 2% from £15.8bn in April.

The CML says forward looking data, like Bank of England data on approvals, suggests the market can expect an increase in lending over the coming months.

But CML economist Mohammad Jamei added: “The economic environment is one that should support increased activity in the near term, coupled with low mortgage rates. But while we expect these factors to support activity, there is a limited upside, driven mainly by affordability constraints.”