In addition to the month-on-month rise, lending rose 19% year-on-year, from £18.4 billion in October 2014. This is the highest monthly figure since gross lending reached £23.6 billion in July 2008.
Bob Pannell, CML chief economist, commented:
"As lending in the regulated mortgage space picked up over the summer months, the pace of recovery has improved. This looks set to continue over the closing months of the year with the factors helping support this recovery continuing to be low inflation, strong wage growth, an improving labour market and competitive mortgage deals.
"As a result lending this year is likely to exceed our forecast of £209 billion, though affordability pressures will limit business volumes for first-time buyers and movers meaning that we think the market has only modest further upside potential over the short-term."
Jeremy Duncombe, Director, Legal & General Mortgage Club, said:
“It’s great to see that lending is continuing to grow, as more favourable economic conditions have helped more people to get on the property ladder. However, it remains crucial to meet this rising demand with a boost in supply. Despite promises from the government, the UK is still not building enough homes to accommodate the increasing number of people seeking homeownership. We must commit to constructing a quarter of a million homes every year if we to bring balance to market, and make homes more affordable.
“Within this, the proportion of lending distributed through intermediaries is steadily increasing, and now accounts for 70% of overall lending. This is good news for consumers as it means that more people are benefitting from full advice, which is helping borrowers to secure mortgage products at more competitive rates that are better suited to their needs.”
John Eastgate, Sales and Marketing Director of OneSavings Bank, added:
“Storms might be battering the country, but it seems that fair winds have driven the mortgage market to a second consecutive month of growth in October, as borrowers make the most of supportive conditions. However scarcity of supply of property remains an issue in a lending market that is still driven very much be refinancing activity. Wages are still growing, while deflation is bolstering incomes in real terms, supporting borrower’s finances. Negative inflation is also kicking a rate rise into the long grass, which is enabling lenders to offer historically attractive rates.”
