Gross mortgage lending rises by a fifth in the UK Gross mortgage lending increased by almost a fifth between the second and third quarters of this year as the housing market has revived. Data from the Council for Mortgage Lenders show gross lending was 17.6 per cent higher in the third quarter than the second, reflecting the rise in mortgage approvals as the economy recovers. "Indicators suggest we are witnessing the strongest house purchase performance in five years," said Bob Pannell, CML's chief economist. House prices, too, have revived, but modestly, aside from a resurgent London market. Figures from the Office for National Statistics on Tuesday showed a 3.8 per cent increase in UK house prices in August, compared with the previous year. In London the rise was 8.7 per cent. Mr Pannell said it was too soon to gauge the impact of the government's Help to Buy scheme - a combination of equity loans and mortgage guarantees for housebuyers with small deposits. Despite the quarter-on-quarter increase in mortgage lending, there was no increase between August and September, according to the CML data. Net mortgage lending - borrowing minus repayments - has barely recovered, indicating that existing homeowners are continuing to pay down their debts even as new buyers climb on to the property ladder. Separately, the Bank of England's "Trends in Lending" report - a summary of recent lending data - showed that businesses have not enjoyed the same credit thaw as housebuyers. The stock of lending to small and large businesses fell in the three months to August.