This is the highest monthly total since July 2009 (£14 billion) and the highest monthly total for August since 2008 (£19.3 billion).
In today’s market commentary, CML chief economist Bob Pannell observes:
"Much of the recent variation in monthly lending figures appears to have reflected seasonal factors, with the underlying picture being one of activity levels that continue to be subdued but broadly stable.
"The August performance more or less offset the weaker than expected July figure. Taking July and August together, lending has shown little change on the same months of 2009 and 2010."
Brian Murphy, head of lending at the Mortgage Advice Bureau, commented:
"After a July which saw the mortgage market blanketed in some very grey clouds, optimists will no doubt rush to see a silver lining in this August data. The month on month rise is an apparently healthy 6%, and there was 10% more lending than in August last year.
"But to call this a bounce would be flattering to say the least. Following the subdued July figures, there is little to be proud of in this increase. More mortgages are being taken out for the simple reason that rates have become far more attractive in recent months and lower house prices are stimulating people to buy.
"The economy is still delicate and confidence is far from robust but increasingly there are more reasons to buy than not to buy, especially with interest rates now looking to be set in stone for at least another year.
"The market, as the CML rightly observes, is still down historically but it is by no means out."
Richard Sexton, director of e.surv chartered surveyors, said:
“The figures are a mirage and don’t reflect the true state of the mortgage market. Vince Cable said yesterday we are in the midst of the economic equivalent of war, and lenders must feel like they’re under attack from all fronts.
"They can’t go on the offensive and start lending in greater volumes over the next few months while they are so busy defending against a barrage of weak economic growth, and requirements to hold up to 20% capital.
"And an assault on so-called ‘casino’ banking, institutionalised by the Vickers report, will further limit the capacity of our major banks to increase their loan books.
"As a result, they are focusing on targeting borrowers with big deposits, leaving lower income buyers in the lurch. Their higher LTV products are nothing more than a low volume smokescreen.
"Before 2008 over one-fifth of all lending was to borrowers with a deposit of under 15%, now it is less than a tenth, which gives a stark indication of just how suppressed the mortgage market is.”
David Brown, commercial director of LSL Property Services comments:
"August's pick-up must be put into the context of a more subdued mortgage market in July, where some mortgage activity was delayed until the following month.
"Nevertheless, the mini-bounceback demonstrates that lenders do have the appetite to lend - despite the challenging economic environment.
"Demand for mortgage finance, too, has improved, with buy-to-let investors and home buyers with sizeable deposits looking to take advantage of historically low rates on offer.
"However, it's difficult to see a double digit percentage improvement in the mortgage market being sustained over the medium term.
"The current turmoil in the markets - combined with many banks' need to repay their debt to the government - makes it difficult to foresee them being in a position to significantly increase their level of funding to would-be mortgage borrowers."
David Whittaker, managing director of Mortgages For Business, said:
“Increased activity levels among investors and professional landlords boosted gross lending in late summer.
"With interest rates set to be kept low for at least another year and the rental market growing stronger by the day buy to let investors have capitalised on low property prices and high yields.
"While lending to first time buyers remains subdued thousands will remain reliant on the private rental sector and landlords will continue to take advantage of the opportunities to increase their presence in the market.”
Duncan Kreeger, Chairman of bridging lender West One Loans said:
“Mortgage offers look pretty attractive at the moment and we’ve certainly seen the evidence of that here at West One Loans. Over August, we saw a very high proportion of our bridging loans paid back early.
"These premature redemptions reflect how much easier it was to secure long-term mortgage finance in August compared not only to July this year but also August 2010. Having said that, we think this is a fillip.
"The long-term trends don’t look very different to us. Strict lending criteria on the high street combined with the growth in the private rented sector look set to continue driving growth in the bridging market.”
