Gross mortgage lending reached £20bn in August, according to the Council of Mortgage Lenders estimate, which marks the third month in a row of “strong year-on-year growth”.
While the latest estimate is 8 per cent lower than July’s lending total of £21.7bn, it is 12 per cent higher than August last year.
Bob Pannell, CML chief economist, said: “Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months.
“August’s lending of £20bn marks the third month in a row of strong year-on-year growth and is the highest August figure since 2007.
“We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers.”
Henry Woodcock, principal mortgage consultant at Iress, said that it looks like mortgage lending “finally came off the boil” last month as the seasonal summer lull limited the overall activity undertaken in the month.
“However, the slowdown shouldn’t be misinterpreted as the market grinding to a halt. Mortgage rates remain at record lows, buoying demand, while we are also seeing a new flurry of low deposit mortgage products hitting the market.
“All of this bodes well for total lending levels for the remainder of the year, in spite of concerns of an interest rate rise. In the longer term, affordability will remain the key constraint for the market, preventing more rapid improvement.
“While wage growth is still showing promising growth, it is being outstripped by rising house prices, and we won’t see this growth subside until the supply and demand balance is addressed.”