Gross mortgage lending reached £22bn in July, according to the Council of Mortgage Lenders, 9 per cent higher than the £20.1bn recorded in June.
The latest estimate also puts gross lending 14 per cent higher than the £19.4bn in July last year and makes it the highest monthly figure since gross lending reached £23.6bn in July 2008.
CML economist Mohammad Jamei explained that the figure is in line with their expectation that lending will strengthen in the second half, following subdued activity earlier in the year.
“We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers.
“Today’s data is in line with our forecast that gross lending will rise to £209bn this year, 3 per cent higher than in 2014.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said that lenders have good capacity and are offering extremely competitive rates, which are proving attractive to those buying and remortgaging.
“For many borrowers the main issue is not so much finding a cheap mortgage rate but being able to prove affordability to satisfy the lender and meet tighter criteria post Mortgage Market Review.”
He also commented that when it comes to forecasting the next interest rate rise, the markets have been consistently wrong for the past five years. Mark Carney, governor at the Bank of England, recently warned that interest rates could rise at the “turn of the year”.
Mr Harris said: “Given that the recovery is still finely balanced, the enormous level of debt and lack of any real reason why interest rates should go up in the near future, it could still be a while before we see a rate rise.
“That said, hints from the Bank of England that we will see one sooner rather than later are focusing the minds of those who need to remortgage, leading to an increase in enquiries about fixed rates in particular.”
Richard Pike, Phoebus Software sales and marketing director, added: “Although predictions vary, will it be this year, next year, when? The economic forces seem to shift every week and making any kind of a prediction is probably unwise.
“The only thing that is certain at the moment is that while talk remains about interest rate rises people will want to make hay while the sun shines.”
peter.walker@ft.com
