The latest figures from the CML show mortgage lending of £138.6bn so far this year and £20bn for August.

Mortgage lending in the UK to August is now higher than the whole of 2010 (£133.8 billion) and 2011(£138.3 billion) after making a strong recovery since the beginning of the year.

The £20 billion for August is 12% higher than this time last year but 8% lower than July. Mortgage numbers in July include 67,800 home buyers including first time buyers, home movers which is a 7.4% rise on the previous month.

In addition there were 31,000 remortgage buyers although this figure was lower by 5.5% on June and 25,200 buy-to-let an improvement of 14% on June.

Highest figures since August 2008

Bob Pannell chief economist at the CML has said mortgage lending is experiencing the highest levels since 2008 as house purchase and remortgage buyer activity picks-up since the summer.

The £20 billion mark reached in August was the third month in a row of strong year on year growth and the highest August since 2007.

Lending in July 2008 was £23.6 billion and this quickly fell more than half to £9.6 billion by February 2009 and remains far behind the July 2007 peak of £33.8 billion.

CML expects to see modest growth for the rest of the year as affordability pressures are likely to limit first-time buyers and home movers.

For older homeowners there is higher activity with equity release buyers accessing wealth in their property using a lifetime mortgage to repay an interest only mortgage or help maintain their standard of living.

Is the housing market overheating?

Figures released by the Bank of England earlier in the month also support the rise in mortgage approvals for house purchases with 68,764 in July up 16.4% from the 17 month low of 59,100 last November.

Mortgage approvals have now increased in five of the last seven months, adding to the rise in house prices across the country and sense of an overheated market.

Lending last year was subdued with the introduction of the Mortgage Market Review (MMR) introducing tighter affordability rules and ahead of the general election reducing fears of a mortgage bubble.

This does not apply to buy-to-let landlords as they must have a 25% deposit and show the rental income can exceed 125% of the mortgage interest.

The rules require lenders to check borrower's income and commitments such as child care and loans and stress test your ability to afford a mortgage at higher interest rates than the record low levels today.

Howard Archer chief economist at IHS Global Insight has said the rise in the July approvals could be due to homeowners securing fixed rate mortgages at the current record low levels before the Bank of England increase interest rates.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage monthly cost calculator and equity release mortgage calculator.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even give to a family member.

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