"Housing market sentiment continued to improve in September, after recovering in August. As a result, we expect a modest rise in approvals, though at levels lower than seen earlier this year"
This is the highest September figure since 2007 when gross lending reached £29.9 billion.
Gross mortgage lending for Q3 2016 was therefore as estimated £63.6 billion, 11% higher than the second quarter of this year and 4% higher than the third quarter of 2015.
CML senior economist, Mohammad Jamei, said: "Remortgage activity looks set to grow, helped by attractively priced mortgage deals encouraging borrowers to refinance. Prospects for house purchase activity continue to look slightly subdued, when compared to the same period a year ago.
"Despite this, housing market sentiment continued to improve in September, after recovering in August. As a result, we expect a modest rise in approvals, though at levels lower than seen earlier this year, as the lack of properties on the market for sale and affordability constraints continue to bear down on borrowers."
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: "Despite all the uncertainty created by the referendum, September proved to be a busy month for the mortgage industry. After the initial shock of the decision to Brexit, people have been keen to move on and get deals done. This has been helped by lenders with an eye on year-end targets, who have been offering some incredibly cheap mortgage deals to entice borrowers.
"Remortgaging numbers are exceptionally strong, with many searching for the certainty of a fixed rate in what are pretty uncertain times. We are also seeing borrowers prefer to release some equity at the same time to extend and improve rather than moving and having to pay much higher transactional costs."
Peter Williams, Executive Director of IMLA, added: “The latest data from the Council of Mortgage Lenders depicts a mortgage market undeterred by the EU referendum result and very much open for business. The 11% increase in lending between Q2 and Q3 shows that borrowers weren’t put off by the economic shadow that a drawn-out Brexit process threatens to cast and lenders haven’t suppressed their appetite to meet this demand. September is often a month when house hunters renew their pursuits after pausing their over summer, but this year’s saw the highest September figure since before the global downturn.
“Any potential bumps in the road are unlikely to come from mortgage lenders as the availability of competitively priced deals remains high – both for purchasers and remortgagors – but issues on the supply side could inhibit activity. The consumer appetite is there, but the simple fact remains that there simply aren’t enough properties coming on to the market at the moment to satisfy this demand, so more thought needs to be given as to how to increase transactions – not least by revisiting Stamp Duty.”
