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UK banks approve more mortgages in May than the month prior

UK banks approve more mortgages in May than the month prior
LONDON - British banks approved more mortgages in May than in April suggesting the housing market remained resilient despite changes in the tax system, industry figures showed on Friday.

British banks approved 42,187 mortgages for house purchases last month, up from 39,967 in April but around 2 percent lower than in May 2015, the British Bankers' Association said.

"Mortgage approvals have bounced back following the sharp drop in April, caused by the initial reaction to the stamp duty surcharge. This increase suggests that claims of a slowdown in house price inflation may be premature," Dr Rebecca Harding, chief economic advisor at the BBA, said.

Britain introduced an extra tax on investors buying properties in order to rent them out as the government sought to address a shortage of homes for owner-occupiers.

Figures from the BBA and mortgage lenders showed an increase in demand after the tax was announced in November as investors sought to buy properties ahead of the new tax.

(Reporting by Ana Nicolaci da Costa, editing by Andy Bruce)