Lenders advanced 146,500 house purchase loans, with higher levels of house purchase lending in July and August feeding through to a 8.2% increase in total gross lending against the previous quarter, said the Council of Mortgage Lenders.
However, according to HMRC data, housing transactions totalled 93,000 in August – the strongest monthly outturn for nearly three years.
Total gross mortgage lending was £11.6bn in September, down 10% on August and 15% compared to the same period last year.
The value of remortgage lending in the three months to August was 24% lower than a year ago, whereas house purchase lending was 6% higher, said the CML.
In September, lenders offered 17,900 loans to first-time buyers worth £2.3bn and 26,500 to home movers worth £4.5bn.
The average loan-to-value (LTV) stayed unchanged for first-time buyers in September at 80%, while loans to these buyers accounted for 40% of all house purchase loans. This was a higher proportion than the previous two months, reflecting the larger decline in the number of loans to home movers.
Home movers accounted for 26,500 loans worth £4.5bn in September, falling from 33,200 loans in August – the highest figure in over two years.
Remortgage lending continued to fall from highs earlier in the year, with £3.3bn advanced, 25% lower than September 2011.
On market share, 53% of first-time buyer loans were sold through brokers, where 45% of remortgages were completed through advisers.
CML director general Paul Smee said: “An increase in house purchase approvals indicated by the Bank of England in September suggests that we may see a return to growth in coming months, but it may take some time before a boost from the Funding for Lending scheme is reflected in house purchase completions.”
Ashley Brown, director of independent mortgage broker, Moneysprite, said the Co-op’s 90% LTV launched last week charging just 3.99% was a game-changer.
“The return of first-time buyer loans priced at less than 4% should inject some much-needed life into the market. Fixed rate products are where the action is. What began as the odd skirmish has turned into a full-blown price war, for both two and five-year fixes,” he added.
