The UK housing market should "feel more stable and positive" in 2013, lenders said today, as they published figures showing that the number of first-time buyer mortgages advanced in October was a fifth higher than a year ago.
Some 20,000 loans were advanced to first-time buyers in October worth £2.5bn (€3.1bn), which also represented a 14% month-on-month increase, the UK's Council of Mortgage Lenders (CML) said.
CML director general Paul Smee said the latest figures suggest that an underlying trend of "modest" year-on-year growth in house purchase lending will continue.
He said: "If the incremental improvements in house purchase lending that we are currently seeing persist as we expect them to, then next year should feel a more stable and positive year in the housing and mortgage markets."
The latest figures indicate that a multibillion-pound Government scheme launched to boost lending to households and businesses could be starting to have an impact, although the CML said it is still too early to fully measure the success of the scheme.
The number of mortgages on the market has increased by around a fifth since the funding for lending scheme was launched at the start of August, although much of the strongest competition among lenders so far has been aimed at people with bigger deposits.
The CML said the number of first-time buyer loans has recovered to similar levels to those seen over the summer following a "slow" September.
The size of the deposit seen in this sector of the market has remained "static" over the last two years at 20%.
Some 29,400 loans were advanced to home-movers in October, worth £4.8bn (€5.95bn). This was a 13% rise compared with September and was up by 5% year-on-year.
Remortgage lending reached a six-month high, totalling £3.5bn (€4.3bn), although this figure is still low by historic levels and is down by 10% on a year ago, the CML said.
More than a million home-owners have seen their mortgage costs go up since the spring after a string of lenders raised their standard variable rates (SVRs) and concerns have been raised that many will have trouble switching to a cheaper deal as lenders have toughened their borrowing criteria.
The CML suggested that the small increase in remortgage lending could be due to the early effects of the funding for lending scheme.
The scheme has the potential to boost remortgaging levels more quickly than lending to home-buyers due to the longer time-lag in buying a house.
Mr Smee said: "An uptick in remortgage lending may be an early sign of a small positive impact of the funding for lending scheme, but it's still too soon to evaluate the effects of the scheme."