Gross mortgage lending reached £20bn in September, up 2 per cent from August’s lending total of £19.7bn, according to the latest Council of Mortgage Lenders estimates.
In addition to the month-on-month rise, lending rose 12 per cent year-on-year, from £17.8bn in September 2014.
This is the fourth month in a row that there has been a sharp improvement in year-on-year lending.
Gross lending in the third quarter of 2015 was therefore an estimated £61.4bn, 18 per cent more than the £52.2bn advanced in the second quarter and an increase of 12 per cent on the third quarter in 2014, when lending totalled £55bn.
CML economist Mohammad Jamei said that lending is currently enjoying its best spell since 2008, with the second half of this year seeing a pick up in housing market activity after a slow start.
“Low inflation, strong wage growth, falling unemployment and competitive mortgage deals are all helping to support housing demand,” he stated.
“We expect to see further modest growth towards the end of the year, although affordability pressures are likely to limit gains for home movers and first-time buyers.”
Henry Woodcock, principal mortgage consultant at IRESS, commented that buoyant house purchase lending, paired with a buy-to-let mortgage market at its strongest level for two years, has sustained momentum across the UK.
He said: “On top of this, the number of mortgage products available is at an all-time high, providing consumers with far more choice and a healthy remortgage market are all combining to create a real buzz.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, agreed that lenders are keen to offer competitive deals, while low interest rates and falling unemployment are combining to encourage borrowers to take out a mortgage or refinance their existing loan.
“With talk of a rate rise not going away and some excellent deals available, it is a good time to remortgage and the number of borrowers doing so is rising accordingly.
“The mortgage market remains over supplied with lenders having more money to lend than there are people looking for mortgages. This means criteria will have to loosen and rates will have to remain low to ensure lenders hit their volume targets.”