Gross mortgage lending has risen by 12 per cent year-on-year to September, according to the Council of Mortgage Lenders, making it the fourth month in a row when this happened.
It reached £20bn in September – 2 per cent higher than August’s lending total of £19.7bn – but remortgaging has not increased as predicted.
This means gross mortgage lending in the third quarter of 2015 was £61.4bn: 18 per cent higher than the £52.2bn advanced in the second quarter and an increase of 12 per cent on the third quarter in 2014.
CML economist Mohammad Jamei said: “Mortgage lending is currently enjoying its best spell since 2008. Low inflation, strong wage growth, falling unemployment and competitive mortgage deals are all helping to support housing demand.
“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.”
Despite this, Mr Jamei said that the increasing demand has not led to an increase in housing supply and pointed to recent research by Royal Institution of Chartered Surveyors, which said the number of new listings fell again in September, marking 13 months of decline out of the last 14 months.
Jeremy Duncombe, director of the Legal & General Mortgage Club, said: “At the beginning of the year, lending was anticipated to reach £220bn. However, as remortgaging has not increased as much as was expected, total lending for the year is now likely to be approximately £210bn.
“While this is positive, it is important that remortgage lending continues to grow in line with other parts of the market.
“There are some excellent rates around at the moment, so advisers should make sure they are talking to their clients now to help them find the right deal for them.”
David Copland, director of The Mortgage Alliance, said: “The CML figures for August were showing a 27 per cent market share in residential remortgages compared with 58 per cent in buy to let.
“It could well be that we are seeing that the process of remortgaging has got harder for residential borrowers, whereas it is still relatively easy for buy-to-let landlords.”