The number of first-time buyers (FTBs) in 2018 reached its highest level since before the global financial crisis, UK Finance’s latest Mortgage Trends update has shown.
Last year, 370,000 new FTB mortgages were completed, a 1.9 per cent increase on 2017 and the highest number since 2006 when it was 402,800.
In the year FTBs accounted for £62bn of new lending, with £5.2bn of that taking place in December 2018.
Meanwhile, the data showed 30,000 home mover mortgages were completed in the final month of last year, as well as 34,000 homeowner remortgages.
Jackie Bennett, director of mortgages at UK Finance said: "The mortgage industry helped 370,000 people buy their first home in 2018, the highest number in twelve years, as competitive deals and government schemes such as Help to Buy continue to boost the market.
"Homeowner remortgaging also saw strong growth driven by customers locking into attractive rates, a trend we expect to continue in 2019 as more fixed-rate mortgages come to an end.
Ray Boulger, senior mortgage technical manager at John Charcol, said: "These figures confirm that virtually all the growth in mortgage lending in 2018 came from remortgaging and FTBs, with the lion’s share from remortgaging.
"Although we don’t have comparative 2017 figures for product transfers the likelihood is that product transfers also increased in 2018.
"Housing transactions last year fell below 2014 numbers and are likely to fall again this year. UK Finance is forecasting mortgage lending will be flat in 2019 and so with lower housing transactions and prices flat remortgaging will need to increase just to maintain gross lending levels."
He added the end of the government’s Help to Buy equity share second charge scheme, which allows buyers to e-mortgage to pay off the Help to Buy equity loan, could have a "major impact" on the volume of mortgage lending post-April 2023.
This was "unless before then the private sector steps up to the plate with viable alternative lending options for FTBs with only a small deposit", he said.
Elsewhere, December saw a 12.5 per cent year-on-year fall in new buy-to-let home purchase mortgages, with a value of £0.7bn for the month.
The fall was also evident for the rest of 2018, where new buy-to-let home purchases were 11.5 per cent lower than in 2017.
Buy-to-let remortgage completions in December 2018 however, rose 25.3 per cent when compared with December 2017, with a value of £2bn.
Matt Andrews, managing director of mortgages at Masthaven, said: "It is interesting to note the continued downturn of buy-to-let activity across the market.
"From tax alterations to regulatory updates, it seems the sector is really feeling the effects of these changes.
"In order to keep the market attractive to buy-to-let investors and to avoid further market uncertainty, greater incentives and lending products will be paramount."
But Kevin Roberts, director of Legal & General Mortgage Club, said the data demonstrated a resilient mortgage market.
He said: "The number of mortgage products available are at some of the highest levels we’ve ever seen and combined with competitive rates, this is continuing to entice borrowers, particularly first-time buyers.