UK Finance has estimated that gross mortgage lending in September was £21.4 billion, 5% higher than a year ago.
Nearly two-thirds of this lending, or £13.7 billion, was carried out by high street banks.
The level of credit card borrowing from high street banks, compared to a year earlier, is 5.5% higher. Annual growth across the whole credit card market was stronger at 7.8%.
Business borrowing has moderated over the course of 2017, with the growth rate for borrowing by wholesale and retail businesses slowing the most, as these customer-facing sectors could be affected by any cutbacks in consumer spending, UK Finance said.
Mohammad Jamei, UK Finance’s senior economist, said: “As we near the end of 2017, our data is showing that housing market activity has built up modest momentum since the start of the year, helped by an increase in first-time buyer numbers.
“Rising inflation continues to put pressure on household budgets which is impacting consumer spending. Consumer credit growth has edged up a little compared to last month, but is in line with annual growth rates over the last year.
“Businesses remain cautious about the future amidst an uncertain economic environment, reflected by their growing deposit activity and a dip in their borrowing growth rate.”
John Goodall, CEO and co-founder of Landbay, added: “Mortgage lending activity dipped slightly in September but remains significantly up on last year’s levels as borrowers continue to take advantage of record low interest rates and loan to value deals. These more accommodating borrowing conditions are however set to change in the coming months as the prospect of the first interest rate rise in almost a decade looms large, putting pressure on borrowers, and potentially putting off first time buyers.
“September’s figures also offer some insight into the final month of lending before the PRA’s portfolio landlord changes came into effect. While these new regulations are a good thing for the sustainability of the buy-to-let sector, we may see a dip in lending in the coming months as the sector adjusts to both the new regulations and a possible rate change.”
