Gross mortgage lending rises 12% to £20bn

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Gross mortgage lending rose by 12 per cent to £20bn in September from £17.8bn a year earlier, the latest Council of Mortgage Lenders estimates show.

The sum was 2 per cent higher than August’s lending total of £19.7bn.

It is the fourth month in a row that there has been a sharp improvement in year-on-year lending.

Gross lending in Q3 was an estimated £61.4bn. This is 18 per cent higher than the £52.2bn advanced in the second quarter, and an increase of 12 per cent on the third quarter in 2014, when lending totalled £55bn.

CML economist Mohammad Jamei says: “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.”

OneSavings Bank sales and marketing director John Eastgate says: “The slight dip in the mortgage market seen in August is now disappearing in the rear view mirror as lending returns to an upward trajectory, growing by 2 per cent in September.

“Buoyancy in the market is supported by persistently low mortgage rates.

“The recent global economic uncertainty has caused central bankers to hit the pause button on possible rate rises, with many speculating that the UK may not see rates increasing before late 2016.

“House prices also grew at their slowest rate for two years last month, and if this trend continues, should ease affordability issues for buyers.”