UK Finance has estimated that overall gross mortgage lending in August was £24.2 billion, of which £15.1 billion was lent by high street banks.
Accounting for seasonal factors, this figure is in the same ball park as monthly lending over the course of 2017.
House purchase approvals by the high street banks reached 41,807 in August, stronger than the monthly average of 41,133 over the last six months and 11% higher than the same time last year when the market was subdued following the referendum result.
UK Finance data shows that consumer borrowing from high street banks slowed to 1.5% in August, down from 1.9% in July.
Non-financial companies’ deposits are growing annually by 8.7% as businesses hold cashflow, the data reveals.
Mohammad Jamei, UK Finance’s senior economist, said: “Housing market activity is in Goldilocks territory, growing only modestly since the start of the year, though the mix of activity has shifted towards first-time buyers, away from buy-to-let and cash. There is also some rebalancing across regions, as activity picks up in the north of England, Wales and Scotland, away from London, the south east and east Anglia.
“Despite resilience in consumer spending, annual growth in consumer credit has been slowing over the last few months. Across the UK some households have opted to save a little less, whilst others have not increased their borrowing. Meanwhile there has been growth in business deposits as non-financial companies hold cashflow and reserves amidst broader uncertainty in their trading conditions.”
John Goodall, CEO and co-founder of Landbay, added: “Mortgage lending levels rose steadily in August, with borrowers continuing to reap the rewards of record low mortgage rates and loan to value deals. The Bank of England’s rate-setting committee has fuelled speculation that the first rate rise in almost a decade is now likely, and soon, so those looking to buy a property or re-mortgage their current property will now be moving fast to lock in a mortgage rate before the change.
“In the buy-to-let market specifically, October’s PRA changes are fast approaching, so some of this uplift is likely down to landlords making changes to their portfolios before the stricter lending and reporting criteria kick in. The changes are a good thing for the ongoing sustainability of the private rental sector, but many landlords are unaware of what the changes mean for them, so we could see a dip in Q4 lending levels while the industry adjusts to the new rules.”
