Homeowners borrowed less for house purchases in October compared to a year ago, but more remortgage loans were taken out, according to the latest data from the Council of Mortgage Lenders.
Homeowners borrowed £10.5bn in October for house purchases, down 8 per cent month-on-month and 11 per cent year on year.
They took out 57,800 loans, down 8 per cent on September and 13 per cent on October 2015.
But remortgage activity increased to £6.1bn, up 11 per cent on September and 7 per cent compared to a year ago, which came to 34,700 loans, up 10 per cent month-on-month and 5 per cent compared to a year ago.
Meanwhile landlords borrowed £3bn, up 7 per cent month-on-month but down 21 per cent year-on-year, which came to 18,600 loans in total, up 2 per cent compared to September but down 25 per cent compared to October 2015.
Paul Smee, director general of the Council of Mortgage Lenders said buy-to-let house purchase lending remains weak following the change to stamp duty on second properties in April.
He said: "With lenders now tightening affordability criteria ahead of the Prudential Regulation Authority’s stress tests and the forthcoming tax relief changes next year, these lower volumes are likely to be the ‘new normal’.
"Home-owner and buy-to-let remortgage lending, however, has recovered and is running at its strongest levels since 2009. This appears to be linked to borrowers taking advantage of the re-pricing of mortgages following the base rate cut.”
First-time buyers borrowed £4.5bn, down 8 per cent on September and 2 per cent on October last year, which equated to 28,900 loans, down 8 per cent month-on-month and 4 per cent year-on-year.
Home movers borrowed £5.9bn, down 9 per cent on a month ago and 18 per cent compared to a year ago, which represented 28,900 loans, down 8 per cent month-on-month and 20 per cent on October 2015.
The data also revealed the amount borrowers are paying as a percentage of their household income to service capital and interest rates reached another historic low this month for both first-time buyers and home movers at 17.6 per cent.