For home purchases 188,000 loans were issued in Q3 totalling £32.4bn, representing increases of 8% and 12% from Q2.
There were 103,600 loans to homemovers amounting to £19.8bn, up 10% and 16% on a quarterly basis.
Remortgage lending also rose by 3% in value and 2% in volume to 77,200, although the latter figure still stands 13% lower than the Q3 2013 figure.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Despite significant regulatory change, the UK mortgage market continues to go from strength to strength, with Q3 2014 experiencing the highest quarterly level of lending since the recession.
“Rather than being restricted by the Mortgage Market Review, many consumers are clearly meeting affordability requirements and successfully accessing mortgage finance, with first-time buyer loan numbers in particular improving since Q3 2013.
“Mortgage borrowers are currently experiencing almost perfect conditions whether buying a home or remortgaging: increased appetite for business among lenders has created intense market competition, leading to frequent product launches and more than 12,000 mortgages available on the market.”
On a monthly basis there were 28,300 remortgage loans issued in September totalling £4.4bn, 20% and 22% higher than August totals.
However house purchase lending dropped off from August by 7% in volume and 8% in value, as September saw 58,600 loans issued to the value of £10bn.
Homemover lending weakened for the second month in a row, with loan volumes standing at 31,700, 12% lower than August.
Paul Smee, director general of the CML, said: “We are approaching the end of 12 months of change, transition and growth.
“This has been a year when lenders and intermediaries have been put under increased spotlight from regulatory, political and media spheres and have risen to meet the challenges.
“The lending market is healthier than it was a year ago, and set to remain so.
“But any fears of over-heating in the housing market are now dissipating as house purchase lending activity seems to be softening.”
On the buy-to-let side there were 18,100 loans in September, representing lending of £2.5bn. This marks an increase of 15% and 14% from August.
Fluctuations in buy-to-let are led by the rise of remortgage lending in the sector, as remortgage loan values increased by 23% and volumes rose by 26%.
For the whole of the third quarter there were 26,370 buy-to-let loans for house purchase, up 10% on the previous period and 16% on the third quarter of 2013.
The value of such loans totalled £3.3bn, up 12% quarter-on-quarter and 26% on Q3 2013.
Steve Bolton, founder and chairman of Platinum Property Partners, added: “Savvy property investors are recognising the strong potential for substantial returns through buy-to-let, while lenders are improving their range of BTL mortgage products in response to rising demand.
“The need for rental accommodation isn’t set to subside any time soon, with an increasingly mobile workforce delaying putting down roots for longer while some are simply priced out of the housing market altogether due to continued property price increases.
“Although there are undoubtedly eye-catching capital returns to be had through buy-to-let, the needs of Generation Rent should be at the forefront of landlords’ minds. This means providing quality, comfortable accommodation at affordable prices.”
