22nd October 2015
Gross mortgage lending reached £20bn in September, marking a 2% rise on August’s total and a sharp 12% year-on-year increase, according to estimates from the Council of Mortgage Lenders.
This is the fourth month in a row that there has been a strong improvement in year-on-year lending.
Gross lending in the third quarter of 2015 was therefore an estimated £61.4bn, a marked 18% higher than the £52.2bn advanced in the previous three months, and an increase of 12% on the same period in 2014, when lending hit £55bn.
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.”
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Commenting on the trade body’s latest figures, Howard Archer, chief UK and European economist at IHS Global Insight said: “The robust September CML data reinforce our belief that house prices will see solid increases over the coming months.
“Taking an overview of the various house price measures, we expect house prices to rise some 7% over 2015 and then by 6% in 2016. A significant upside risk to these forecasts is currently coming from the shortage of houses on the market.”