However as expected remortgaging continued to decline with 25,528 approvals in September against 28,348 in August, and a six month average of 31,604.
Net lending to individuals increased by £0.7 bn in September which was below the £0.9 bn increase in August but ahead of the six month average of £0.5 bn.
CML economist Paul Samter observed: "There is clear evidence of a significant pick up in housing market lending activity from a year ago, even though it remains low on any historic comparison. On the other side of the gross lending equation, remortgaging volumes continue to weaken. Borrowers seem to be opting to stay on low reversion rates, with official interest rates not expected to rise for some time yet.
"Overall, the numbers support our view that housing market activity continues to strengthen. But we are cautious about how far we can expect it to continue increasing, with funding still a challenge and the economic outlook still subdued."
