The Council of Mortgage Lenders (CML) has revealed that first-time buyers borrowed £4.6bn for home-owner house purchase, up 10% on September and October last year. This totalled 29,900 loans, up 8% month-on-month and 3% year-on-year.

Meanwhile, home movers took out 35,400 loans, up 9% month-on-month and 3% compared to October 2014. In total, this was £7.1bn borrowed, up 8% on September and 13% year-on-year.

Home-owner remortgage activity also increased, up 6% by volume and 10% by value compared to September. Compared to October 2014, remortgage lending was up 19% by volume and 34% by value.

Gross buy-to-let saw month-on-month increases up 4% by volume and 3% by value, but more substantial growth year-on-year.

Paul Smee, director general of the CML, said: “Home owner and buy-to-let activity have both continued the upward trend seen last month, and the market looks set to finish the year strong, despite taking time to gain momentum after a slow start to 2015.

“With increasing employment and the current absence of inflationary pressures in the UK, conditions for continuing demand in the housing market seem likely going into the new year. How supply will respond to this challenge going forward is a crucial question for 2016.”

Jeremy Duncombe, director of Legal & General Mortgage Club, added: “Strong UK economic conditions, driven by low rates, low inflation and rising wages, spurred mortgage lending in October. It is encouraging to see that remortgaging activity has continued to increase after a slow start to the year, as more people have sought to take advantage of the low rates available. With that said, however, fixed rates have edged up over the past few weeks as lenders start to price-in a future rise in the bank rate. It is therefore paramount that borrowers seek advice to secure a low rate today or risk missing out on a substantial cost saving.

“The figures also show that buy-to-let activity remained strong in October as more people looked to alternative ways in which to invest their money. We expect this area of the market to become more active in the next few months, ahead of the new Stamp Duty rate which is due to be introduced in March 2016.

“Prospective landlords may rush to the market ahead of this change to avoid the additional cost, which will drive up mortgage lending in Q1 2016. The resulting increase in demand, combined with the current lack of available properties, is likely to push up house prices at the beginning of the year.”