In addition to the month-on-month rise, the CML reports year-on-year gross lending rose 15% from the £19.5bn recorded in August last year. This is the highest figure since August 2007, when lending was at £33.6bn.
Mohammad Jamei, a senior economist at the CML, says the figures prove that the widely-voiced fears regarding the state of the housing market have proved to be “wide of the mark.”
“Prospects for house purchase activity post-referendum look slightly subdued, when compared to late 2015 and early 2016,” says Jamei “However sentiment recovered in August. This is reflected in stronger-than-expected transaction figures, and in our gross lending estimate.”
According to Jamei, the improvement in sentiment is the likely the result of a number of factors, including monetary stimulus by the Bank of England and its introduction of the Term Funding Scheme in August.
He says: “A subsequent uptick in approvals is anticipated, albeit still at levels lower than earlier this year as affordability constraints and lack of properties on the market for sale continue to bear down on borrowers. The Bank also continues to indicate another rate cut on the cards, if medium term prospects remain unchanged.”
David Copland, director of mortgage services at LSL Financial Services said the robustness of the mortgage market post-Brexit continues to surprise.
“With gross lending up 15% year-on-year, the CML’s figures are the latest to defy doomsday predictions of a housing slump. Although advisers must continue to operate with healthy scepticism, the underlying strength of completions give us every reason to remain confident in the UK housing market.”
