First-time buyers borrowed £53bn in 2016, 13% more than in 2015 and higher than in any year since records began in 1974, the data showed.
Meanwhile, homemovers borrowed £74bn, up slightly by 3% on a year earlier. Remortgage activity was buoyant as existing homemowners withdrew £66bn to refinance their properties – an increase of 20%.
The buy-to-let lending market, which has been dealt a number of regulatory blows and taxation changes over the past 12 months, increased by 7% in 2016 reaching £40bn. However, activity in the sector was largely supported by remortgaging which accounted for nearly two thirds of the lending total.
Paul Smee, director general of the CML, said the market had overcome “potentially destabilising” regulatory and political change during 2016.
“Home-owner house purchase lending increased, though the buy-to-let sector’s positive lending performance has been driven primarily by remortgaging. We do not expect the market volumes to show a year-on-year increase in 2017, but instead, remain similar to that achieved in 2016.”
Further data out today from the Land Registry and Office for National Statistics (ONS) showed that house price growth reached 7.5% in 2016, 1.6% higher than that recorded in 2015.
Despite healthy market growth, house price inflation slowed during the second half of the year, the ONS said. The annual growth rate of the UK for Q1 and Q2 was 7.9% and 8.7% which later slowed to 7.2% and 6.4% in the final two quarters of the year.
As of December 2016, the average house price was £220,000, £15,000 higher than a year earlier and £3,000 higher than in November.
Founder and CEO of eMoov.co.uk, Russell Quirk, said: “Not only did prices see an increase of 7.2% annually, but heading into what is a quiet time of year for the market, an increase of 1.4% in prices and an uplift of 0.2% in transaction volume month on month, is a promising sign indeed for the year ahead.
“This latest market insight should spur a renewed confidence in UK homeowners that we have very much weathered the storm and that UK property is an attractive a proposition as it has ever been, whether you are buying or selling.”