Mortgage lending picked up in November, according to a trade association, as the number of homeowners taking up fixed-rate deals hit the highest level in more than two years.
The number of house-purchase loans increased year-on-year for only the second time in 2011 by 3% to 47,000, or a 5% increase in value to £6.9bn, according to the Council for Mortgage Lenders (CML). Remortgaging also increased to 31,200 from 30,700 the previous November.
Fixed-rate mortgages were taken out by 65% of all borrowers, CML said, up from 62% in October as borrowers took advantage of current favourable rates.
Mortgage providers - such as Nationwide and the Post Office - have slashed rates on a range of fixed-rate mortgages as the Bank of England continues to hold its base rate at a historic low of 0.5%.
Despite the growth in lending in November, Howard Archer, chief UK and European economist at IHS Global Insight, said the housing market still remains low compared to long-term norms and is likely to come under increasing pressure in 2012.
Mr Archer said house prices are expected to fall by 5% in 2012 as "weakened economic activity, rising unemployment, muted wage growth and very low consumer confidence" weigh on the market.
Elsewhere, CML said first-time buyers took out 17,300 loans worth £2.1bn in November, up 4% in volume and 5% in value compared to a year ago.
First-time buyers continued to see a decline in the proportion of their income accounted for by mortgage interest payments - 12.2% in November, compared to 12.3% in October and 13% last year.
CML said that while the number of first-time buyers has declined "markedly" since the credit crunch, the proportion of loans advanced to first-time buyers has remained "remarkably steady".
In November, first-time buyers took up 37% of the market.
Meanwhile, home-mover loans increased by 2% in value and volume compared to a year ago.
Looking ahead, CML director general Paul Smee, said: "We should expect a further increase in first-time buyer activity over the next few months as they push through their purchases to take advantage of the stamp duty concession before it ends in March."