Lending hit a post-crisis quarterly high despite a seasonal dip in September as the market rebound continues, according to two sets of housing market figures published yesterday.
Intermediaries and property analysts now expect a strong end to the year, as confidence continues to grow.
Total lending for house purchases in Q3 hit the highest quarterly level since 2007, according to CML figures. Despite a seasonal 14% dip in September, compared to August, lending is still up 20% year-on-year.
First-time buyers took out 23,600 loans in September, a 34% increase over the last 12 months.
And falling interest rates have driven growth in remortgage lending, up 20% in September compared to August.
ONS figures also published yesterday showed house prices rose 3.8% in the year to September 2013, up from 3.7% in the 12 months to August.
London continues to lead the way with a 9.4% annual rise, followed by the South East 4% and Yorkshire and the Humber at 3%. But prices fell 1.1% in Scotland and 1.5% in Northern Ireland.
Excluding London and the South East, UK house prices increased by 1.4% in the 12 months to September 2013.
Brian Murphy, head of lending at Mortgage Advice Bureau, said the combination of Help to Buy 2 and the traditional New Year rush is likely to invigorate the market further.
"Doomsayers expecting a housing price bubble as a result of the scheme will be relieved to see modest annual growth, which suggests the market is stable and most importantly, affordable for consumers."
Peter Williams, executive director of the Intermediary Mortgage Lenders Association, said the September slowdown doesn't affect the favourable outlook. "We could easily see a gross mortgage lending for the year well in excess of £160 billion. All in all, we are looking at a much stronger market in the second half of this year."
Richard Sexton, director of e.surv chartered surveyors, said: “The mortgage market is brimming with vim and vigour. Help to Buy has pepped up lending levels, and for many buyers it has transformed the idea of buying a home from distant dream to tangible reality."
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "While all this is encouraging, it needs to be put into context. Transaction levels are still well off their pre-crisis peak although the market is moving in the right direction."
Peter Rollings, chief executive of Marsh & Parsons, said: “The London property market is singing from a different hymn sheet, with price increases dwarfing those in the rest of the country. This is particularly true in prime London, where over half of all homes are now worth £1 million or above.
Nicholas Ayre, managing director of homebuying agency Home Fusion, said the ONS figures show there is no house price bubble. "The London market is more frenetic than other parts of the country with sealed bids and gazumping making an unwelcome return, but this is particular to the capital. Elsewhere, prices are either rising steadily, remaining flat or even falling."
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