The property market is set for a strong finish to 2015 after a healthy 8% rise in house purchase lending in October to £13.3 billion.
First-time buyer borrowing jumped 10% over the month to £4.6 billion, with an 8% rise in total loans to 29,900, according to the Council of Mortgage Lenders.
Paul Smee, director general of the CML, said increasing employment and the absence of inflationary pressures growth should make for a strong 2016.
“How supply will respond to this challenge going forward is a crucial question.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the mortgage market is gathering real momentum, with increases in lending for first-time buyers, home movers and remortgages and landlords.
“After a slow start fuelled by general election uncertainty, it is proving to be a back-loaded year, with November and December continuing to be busy.”
Harris said lenders have a keen eye on year-end targets so there are some very competitive deals to tempt borrowers.
“Even though a handful of lenders have raised rates in the past week, this may be more to do with trying to control business volumes over the festive period rather than evidence of the start of an upwards trend in pricing.
“We still expect plenty of competitive rates in the January sales.”
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said the volume of monthly mortgage lending shot up in October to reach the second highest value since 2007.
“Existing homeowners also recognised the advantages of swapping to a new deal, with the value of remortgage loans hitting highs not seen since January 2009.
“October’s upsurge sets the scene for a healthy end to mortgage activity in 2015 despite the slow start to the year.”
Murphy added that rising house prices are likely to cause affordability concerns for first-time buyers, compounded by the shortage of housing supply.
Jeremy Duncombe, director, Legal & General Mortgage Club, welcomed growth in remortgaging activity.
“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.”