It is 41% higher than September 2012 when gross lending was £11.5 billion but slightly lower than August's gross lending total of £16.4 billion.
The data also shows that gross lending for the third quarter of 2013 was an estimated £49.3 billion, a 17.6% increase on the second quarter of 2013 and a 32% increase on the third quarter of last year and the highest lending amount by quarter since the third quarter of 2008.
‘Indicators suggest we are witnessing the strongest house purchase performance in five years. House prices too have revived but modestly, aside from a resurgent London market,’ said CML chief economist Bob Pannell.
‘With the Help to Buy mortgage guarantee scheme becoming fully operational in January and firms implementing the mortgage market review in April 2014, it may be several months into 2014 before we get a true gauge of the scale and reach of Help to Buy. For now, the scheme has launched against an already recovering UK housing market with several quarters of improving credit availability, growing competition, and strengthening demand,’ he added.
Paul Hunt, managing director of Phoebus Software, said that it is great to see so many new signs of life in the housing market which has been static for a while. ‘While the economy continues to grow, the whole market is gaining strength and lending should continue to rise. We’ve started seeing impressive month on month increases in mortgage lending and high loan to value lending is 60% higher than this time last year,’ he explained.
‘Mortgage rates are set to remain low for the next three years. It’s clear conditions have eased for borrowers. Lenders are being proactive in their approach to advance high LTV loans. On top of this, Help to Buy will support masses of borrowers who are struggling to save up for a deposit,’ he added.
According to Mark Abrahams, director of West One Loans, the largest privately funded short term lender in the UK, despite the small monthly stumble in September, the outlook is exciting. ‘More widely, the economy looks healthier than it has for years. But there's no room for even a hint of complacency given the scale of the work that still needs to be done. To maintain momentum, this year's new lease of life for the property market needs to stimulate more investment and vital renovation on the ground,’ he said.
‘There are signs that's already starting to happen with the construction industry growing once again. But in order to really gain traction, the property industry needs more imaginative finance. Complex projects require a carefully tailored approach to mitigate the risks. In these cases, the bridging industry is stepping in where mainstream banks cannot – and helping scores of new homes and commercial premises to take shape,’ he pointed out.
‘As the recovery progresses, lenders will need to demonstrate they've learnt the lessons of the financial crisis. Finance should be personal. Automated processes are what got us into this mess but now it's dynamic, flexible and above all personalised lending that's hauling the UK out of the doldrums,’ he added.
Brian Murphy, head of lending at the Mortgage Advice Bureau (MAB), said the data paints a picture of a thriving and increasingly accessible mortgage market. ‘We have already seen more mortgage applications this year than in the whole of 2012, and the fall in fixed rates over the last 12 months mean that buyers can save as much as £1,080 on their annual mortgage payments,’ he explained.
‘With increasing mortgage product availability and competition between lenders, homebuyers with a deposit saved can enjoy an Indian summer in the property market. Confidence is the key and the Help to Buy scheme should stimulate consumer demand to the end of the year and beyond,’ he pointed out.
‘Buyers will clearly hope for improved rates from new Help to Buy products as more lenders enter the scheme, especially as they can already choose from the lowest average two and three fixed deals on record. It is still early days for the scheme, but access to 95% mortgages will play into the hands of first time sellers, as well as first time buyers, and encourage greater movement in the market,’ he added.
The recovery in lending has been dramatic, according to David Brown, commercial director of LSL Property Services but he pointed out that overall lending appears to have levelled out from the huge recent monthly climbs and is still short of pre-crisis levels. ‘Household budgets continue to be squeezed by rising living costs, rock bottom saving rates and slow income growth which are all obstacles on the path to home ownership. For this reason we’re unlikely to see any seismic shift from the increasing trend in turning to rented accommodation,’ he said.
‘Luckily this has become more affordable as rent rises, despite reaching record highs, are below inflation levels and comparatively lower than other financial pressures,’ he added.
