Figures releases this morning by the Council of Mortgage Lenders revealed that UK lenders advanced 37% more money to homebuyers and remortgagors this October (£17.6bn) than in October 2012(£12.9bn).

That was an increase of 9% on September and represwents a five-year high.

CML chief economist Bob Pannell said:

“Housing activity is set to strengthen further in the short-term, and to contribute materially to overall economic growth.

“Combined with the Bank of England’s recent optimism about the economy, this has led some commentators to speculate that an early rate rise may be on the cards. We do not currently share this view, which we believe underplays the importance that the Monetary Policy Committee attaches to a secure recovery before raising rates.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said:

“We are coming to expect inexorable rises in mortgage lending and October’s figures don’t disappoint. The lending numbers have bumped around the £16bn mark for the latter part of this year, but this is the first time they have broken through the £17bn barrier. ‘

“But let’s not get carried away: while this is the highest monthly estimate for gross lending since October 2008 at £18.6bn, it is still five per cent off that figure, so the recovery is still very much underway.

“This increase in lending will continue to fuel the debate about an early interest rate rise. However, borrowers shouldn’t panic as we believe that with inflation falling close to its two per cent target and the economy still in recovery mode, it is unlikely that the Bank of England will risk hiking interest rates too soon. Even when the seven per cent unemployment target is met, this is a threshold not a trigger for rate rises.

“Having said that, borrowers who are worried should consider one of the excellent fixed rates available.

“The launch of the second phase of Help to Buy is too recent to influence lending numbers but the early signs are positive and it will undoubtedly assist in the revival of the housing market. What will also help is an increase in competitive high LTV deals available beyond the scheme. Yorkshire Building Society has today launched a range of products at 95 per cent LTV, starting at lower rates than those available via Help to Buy, and we expect other building societies to follow suit, increasing the choice and rates available to first-time buyers and home movers with modest deposits.”