The Council of Mortgage Lenders (CML) has estimated that gross mortgage lending reached £20 billion in August.
This is 8% lower than July’s lending total of £21.7 billion, but 12% higher than August last year (£17.8 billion).
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 £20 billion 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.”
John Eastgate, sales and marketing director of OneSavings Bank, said: “Lenders traditionally see a summer lull in the mortgage market in August, with prospective borrowers more focussed on vacations rather than applications. For many lenders this year was no different. With this in mind, lending was always going to struggle to top the seven year high we saw in July.
“However, let’s not confuse a monthly blip with a long-term trend. Buy-to-let lending remains healthy, and conditions are supportive for homeowners too, with mortgage rates still near the bottom, while we are also seeing a return of low deposit products, which will support activity. Yes, house price growth will continue to stretch affordability, so it’s encouraging that wage growth is accelerating, although that does, of course, bring with it inflationary pressures and the prospect of interest rate rises.”
