Remortgaging now accounts for 31% of gross lending, according to LMS analysis of Council of Mortgage Lenders’ (CML) figures.

Gross remortgage lending increased by £763m in October to £4.1bn. This is up 23.1% from the £3.3bn reported by the CML for September.

According to the latest figures from the CML, gross mortgage lending reached an 11-month high in October, rising 13.3% from £11.4bn in September to £12.9bn. Remortgaging now represents nearly a third of the total market (31%).

LMS said this marks a significant turnaround since August when gross remortgage lending was at its lowest level for 12 years (December 1999). The firm expects this growth to continue into November due to the high number of competitive remortgage deals coming on stream from lenders.

The average remortgage loan amount rose by over £750 to £138,200 in October, the highest it has been since the beginning of the year. Average loan amounts are now up 5.7% on the same time last year (£130,763 – October 2011) and are currently at their highest level since December 2008 (£143,126).

LMS figures indicate that the total number of remortgage loans advanced increased by 19.5% in October, up from 24,600 in September to 29,399. This is just short of the 31,200 advanced during October 2011.

“October showed a second consecutive month of growth in the total value and number of remortgages as people took the opportunity to snap up the good deals that are now available – uncertain about just how long they might be around,” said Andy Knee, chief executive of LMS.

“Factors such as the government’s Funding for Lending Scheme and increased lender competition have acted as a positive influence on the market and attracted homeowners who were otherwise happy to sit tight on a lender’s SVR.

“Renewed levels of activity in the mortgage market are feeding through to property prices which are robust and both of these will serve to further boost consumer and lender confidence this side of Christmas.”