Gross mortgage lending jumped significantly in Q3 compared with the previous quarter as signs of an improving housing market continue, Council of Mortgage Lenders (CML) data shows.
Lending climbed to £38.9bn in the three months to end September Q3 2009, a rise of 18% on Q2, it says.
In September alone, mortgage lending totalled an estimated £12.5bn, a 2% rise on the £12.3bn recorded in August, but still 27% down on the figure recorded in the same month last year.
The CML says although there has been a pick-up in house purchase activity, this has been offset by a decline in remortgaging.
Economist Paul Samter says house buying activity is running at considerably higher levels than at the start of the year but warns it "remains weak on any historic comparison".
"[House buying activity] is unlikely to rise much further given the constraints the lending community faces and a still-difficult economic backdrop," Samter says.
In a further sign of positive news for the market, Samter believes the wholesale markets have begun to thaw in recent weeks with institutions such as Lloyds Banking Group (LBG) able to issue structured finance products backed by mortgages.
"This is only an early sign of wholesale investors tentatively coming back into the new issuance market, but is welcome nonetheless," he adds.
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