Gross mortgage lending in August reached £22.5bn, according to the Council of Mortgage Lenders.
This was 7 per cent higher than July’s lending total and 15 per cent higher year-on-year.
Last year’s August gross lending was £19.5bn and this year’s was the highest August figure since 2007, when it reached £33.6bn.
CML senior economist Mohammad Jamei said: “Widely voiced fears in recent months about the housing market have proved to be wide of the mark.
“Prospects for house purchase activity post-referendum look slightly subdued, when compared to late 2015 and early 2016.
“However, sentiment in the market recovered in August. This is reflected in stronger-than-expected transaction figures, and in our gross lending estimate.
“This recovery in sentiment is likely to be down to a number of different factors, including the Bank of England’s monetary stimulus and its introduction of the Term Funding Scheme in August.
“A subsequent uptick in approvals is anticipated, albeit still at levels lower than earlier this year as affordability constraints and lack of properties on the market for sale continue to bear down on borrowers.”
Mr Jamei said the low number of properties for sale was a concern, with the average number of properties per surveyor close to its lowest ever level.
He said: “This has the potential to reduce the number of transactions, if potential buyers struggle to find properties they want to purchase.
“Adjusting for seasonal factors, lending has been stable fairly over the last few months but, under the surface, the mix of lending is moving towards remortgage activity.
“This is most evident in the buy-to-let sector. House purchase activity for buy-to-let continues to remain subdued, even as we move away from the stamp duty change, and is firmly down compared to a year ago.
“This looks set to continue going forward, given that lenders have been tightening affordability criteria in anticipation of the forthcoming interest tax relief changes in April 2017.”
Increasing numbers of lenders are demanding rental coverage of 145 per cent for buy-to-let mortgages because of the decision to restrict the amount of tax relief a landlord will be able to claim on mortgage interest to the basic rate.
This has raised the prospect of some borrowers becoming mortgage prisoners.
John Eastgate, director of sales and marketing at OneSavings Bank said the lack of purchase activity could push mortgage rates down even further.
He said: “Remortgaging has become the key driving force, as borrowers make the most of record low mortgage rates which, if anything, might fall even further.
“The affordability gap continues to drag on house purchase figures, and will do so for as long as housing demand outstrips supply, bolstering house prices in the long-term.”
