House purchase lending leapt 17% in October thanks to a doubling in high-LTV lending and "swathes" of first-time buyers hitting the housing market.
This helped drive a 24% rise in lending in the last 12 months, according to latest mortgage lending profile from the CML.
First-time buyers were advanced 26,800 loans in October, CML figures showed, the highest number in a monthly period since November 2007.
Buy-to-let advances also increased in October by 11% to 16,200 loans, up from 14,600 in September.
The positive news continued today with new figures from LSL/Acadata showing house prices rising £11,219 over the past year, the fastest rate of growth in three years.
Property sales in 2013 are set to be 16% higher than 2012, it said.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), said the closure of the Funding for Lending Scheme (FLS) for mortgages gives lenders every incentive to make as many loans as possible before the year end.
"This might trigger a lull early next year but there is an extra kick to come when the gates fully open for lending to applicants through the Help to Buy mortgage guarantee scheme."
Paul Hunt, managing director of Phoebus Software said: "The figures show high-LTV lending has doubled compared to a year ago, a sign that lenders have been proactive in their approach to lending.
"Although the Funding for Lending scheme may have been scrapped, lending will continue to rise in 2014 thanks to Help to Buy, which will be the main force in driving the market forward.
"I expect further signs of recovery to lending levels in the New Year.”
Richard Sexton, director of e.surv chartered surveyors, warned that even though more first-time buyers are able to access finance, they are being forced to take out bigger loans than ever before, as a consequence of rising house prices.
"This can only continue for so long. Houses are becoming much more expensive, but salaries aren’t keeping pace, and unless lenders vary criteria further this could price many first-time buyers back out of the market.
“We must keep a lid on the rising cost of homes and the only way to do this is to increase house-building.”
David Whittaker, managing director of Mortgages for Business, said landlords in particular have benefited from lower mortgage rates than a year ago. "In 2014 I expect finance will become easier to access and more flexible, while demand for property seems set to keep on growing.”
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