Total gross mortgage lending in July increased to £16.6bn, representing a rise of 12 per cent from the previous month, the Council of Mortgage Lenders has estimated.
The latest figure is 29 per cent higher than the total of £12.9bn in July last year. This is also the highest monthly estimate for gross lending since October 2008, when it was £18.6bn.
Market commentators have attributed the growth in mortgage lending to government initiatives.
David Newnes, director of LSL Property Services, said: “Help to Buy and Funding for Lending have been key to the recovery. The schemes are encouraging lenders to roll out a wider and cheaper range of products as they try to compete for market share.
“Borrowers have more choice than at any point since 2008 and lenders are making it substantially easier to access high LTV loans. Cheaper mortgages have transformed buying conditions and opened up the market to a wider range of potential buyers.”
Paul Hunt, managing director of mortgage software solution firm Software, said: “Optimism is growing rapidly as gross mortgage lending is up by 12.6 per cent, and has grown substantially to the highest level we’ve seen since October 2008. And first-time buyer lending is at its highest since the banking crisis.
“The Funding for Lending scheme has worked wonders in supporting mortgage availability and has boosted cheaper funding as banks and building societies have been able to lower their costs. At the same time Help to Buy has emerged as another incentive for banks to increase high LTV lending even more.
“Mortgage rates are at record lows and lenders have helped transform conditions for a range of buyers thanks to their proactive approach to lending.”
Richard Sexton, director of E.surv chartered surveyors, added that the freeze on high LTV mortgages has thawed, and first-time buyer lending is at its highest since the banking crisis.
He said: “Rates are at record lows, and there are wider range of deals for borrowers to choose from than at any point since 2008. The slew of mortgages has sent sales soaring and house prices to record highs. The mortgage market has received much more help and attention from the government than other areas of the economy.
“Banks have used Funding for Lending to focus on improving household lending, which they see as safer than lending to SMEs, and Help to Buy offers another incentive for banks to increase high LTV lending even further.”
Caroline Purdey , CML market and data analyst, said: “An improvement in sentiment and activity continues to show in the UK housing and mortgage markets, with a more positive picture also starting to emerge in the economy.
“Our forward estimate of gross mortgage lending in July reinforces a growing evidence base of a strengthening in the housing and mortgage markets.”