The British Bankers’ Association said a total of £9.7bn was lent to consumers during September. This constituted a £0.2bn rise on August’s figures and is more than £1bn ahead of the average recorded over the last six months.
Net borrowing fell by £0.3bn during the month as more people took advantage of low interest rates to overpay on their mortgages.
The number of approvals for both house purchase and remortgage rose in September, with more home loans completed in the month than any since 2009. The BBA said government assistance schemes were behind the rise in activity among first-time buyers and this had provided a boost to other properties on the housing chain.
Mark Harris, chief executive SPF Private Clients, said: “Consumer confidence continues to improve, with demand for housing strengthening. Some buyers are worried about being priced out of the market further, while others are finally convinced that they will be able to get hold of mortgage finance at excellent rates so it’s as good a time as any to take the plunge.
“It is also encouraging that there remains a strong trend for borrowers to overpay on their mortgages, taking advantage of low interest rates and paying down debt where they can. Confidence may be growing in the housing market but homeowners are reluctant to take on more borrowing while there is still uncertainty with regard to the economic and jobs’ climate.”
Remortgage lending has risen by more than a fifth in the past year, and now accounts for almost a quarter of the mortgage market.
Figures from LMS suggest remortgage lending reached £3.9bn in September, up 10% on August and 20% on the same month in 2012.
Andy Knee, LMS chief executive, said: “Following a slight knock in August, the remortgage sector appears to have leapt back on its feet – with remortgage lending growing by more than 10% during September. The market as a whole has been contracting slightly over the past three months, and as a result remortgages now account for a larger proportion of the market.”
