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."
Steve Griffiths, Head of Sales and Distribution at Kensington, said that it is important to judge the health of the market not just by the topline number but also the diversity it delivers.
He commented:
“Many consumers have variable incomes or may have had a credit issue in the past. It is important that the market is able to cater for these credit-worthy but more complex groups, as well as those who have more straightforward applications. To ensure that different types of borrower are given the opportunity to access homeownership, it is vital that the specialist lending sector continues to grow in line with the wider market.”
David Copland, director of TMA, added:
“There is a significant uplift in the Q3 figures as the corresponding quarter in 2014 took into account the changes brought on by the mortgage market review, an 12% increase is pretty significant. It will be interesting to see how these figures breakdown by way of residential and buy-to-let. The CML figures for August were showing a 27% market share in residential remortgages compared with 58% in buy to let, why is that? 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.”
