Gross mortgage lending fell 7 per cent in the month to September, according to figures from the Council of Mortgage Lenders, but reached a nine year high for the month.
The monthly study found that gross mortgage lending reached £20.5bn in September, a fall of 7 per cent from the £22.5bn seen in August but 2 per cent higher than the £20.1bn lent in September last year.
However, the figure marked the highest September for mortgage lending since 2007 when the figure reached £29.9m.
The CML found that gross mortgage lending for the third quarter of 2016 was estimated at £63.6bn, 11 per cent higher than the second quarter of this year, and 4 per cent higher than the third quarter of 2015.
CML senior economist Mohammad Jamei says: “Remortgage activity looks set to grow, helped by attractively priced mortgage deals encouraging borrowers to refinance. Prospects for house purchase activity continue to look slightly subdued, when compared to the same period a year ago.
“Despite this, housing market sentiment continued to improve in September, after recovering in August. As a result, we expect a modest rise in approvals, though at levels lower than seen earlier this year, as the lack of properties on the market for sale and affordability constraints continue to bear down on borrowers.”
Bluestone Mortgages managing director Matt Andrews says that while there are positive signs in the market, certain borrowers are still struggling to secure mortgages.
“There is still a growing number of borrowers, such as contractors, self-employed or those who have experienced a genuine life bump, being forced out of the market for not fitting typical lending criteria.
“What qualifies as a ‘standard’ borrower is evolving and the market needs to evolve with this to ensure legitimate customers are not locked out of homeownership. Only when lenders view this group of underserved people as individuals with their own financial histories and circumstances, instead of just numbers on a credit report, will our market truly return to full strength.”