In October, 40,851 mortgages were approved for house purchases, compared to 38,690 in September and 45,352 during the same period in 2015.
Total gross lending by banks last month reached £12.5bn. Broken down into transaction type, growth in remortgage activity outperformed purchasing, which fell YoY.
Andy Knee, chief executive of conveyancing service provider LMS, said: “The EU referendum and resulting record-low rates are driving families to capitalise and reduce their monthly mortgage bills.
“With a potential rate rise in 2017, something that 23% of remortgagors have told LMS they expect, it is comforting to see homeowners taking stock and striving to improve on their current mortgage deals.”
Year-on-year, the value of remortgage lending by banks in October rose by 4% to £4.5bn while house purchasing saw a decline of 6% from £8bn to £7.6bn.
Remortgage approvals remained fairly static last month, compared to the previous year, at 24,622; just 63 approvals higher than October 2015.
Knee added: “In general, the UK housing market is well positioned for the challenges that 2017 poses. The latest figures from the Department for Communities and Local Government show a spike in new-build dwelling starts and completions for England in Q3, in comparison to the previous quarter.
“The Chancellor’s announcement of a Housing Infrastructure Fund worth £2.3bn in yesterday’s Autumn Statement is a sign of the government’s intent to tackle the housing supply issue, crucial for market stability, which will make the UK property market more favourable for first-time buyers and remortgagors alike.”