The Council of Mortgage Lenders (CML) has estimated that gross mortgage lending reached £20 billion in September.
This is 2% higher than August’s lending total of £19.7 billion.
In addition to the month-on-month rise, lending rose 12% year-on-year, from £17.8 billion 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 £61.4 billion. This is 18% higher than the £52.2 billion advanced in the second quarter, and an increase of 12% on the third quarter in 2014, when lending totalled £55 billion.
CML economist Mohammad Jamei said: “Mortgage lending is currently enjoying its best spell since 2008. As we expected, the second half of 2015 has seen a pick up in activity in the housing market after a slow start to the year. 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.”
Jeremy Duncombe, director of Legal & General Mortgage Club, added: “After a small dip over the summer, lending has picked up as we move into autumn. 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 around £210bn. This would still be an increase on lending last year, showing the market is continuing to grow. Whilst this is positive, it is important that remortgage lending continues to grow inline 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. Consumers may think they can wait until the Bank of England base rate rises to secure a new deal, however advisers need to make them aware that the best rates will not be around then, so they need to act now.”