Lending rose by £9.8 billion in October, while new mortgage approvals rose to 128,000 – the highest since December 2003.
The figures point to continued strength within the housing market despite the Base Rate rise in August.
Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors (RICS), said: "The rise in mortgage approvals in October to the highest level in almost three years highlights the extent of the housing market upturn this year, with increasing signs of strength throughout the country. Rising sales are not just limited to the central London market with RICS members reporting that transactions are evident across most regions, due to the benefits of the firmer economic climate in the jobs market."
Lending jumped by almost £1billion inside a month, from £8.9billion in September, which was well above the estimates of £9billion.
Many commentators are now looking towards next month’s figures to see if November’s increase in Bank Base Rate, from 4.75 per cent to 5 per cent, has affected the market.
Peter Charles, chief economist at Bradford and Bingley, believed it was too early to tell how the November Base Rate decision had impacted on the housing market.
He explained: "We will have to wait until the New Year to see if there has been any slowdown due to the rate rise.
"We’re still expecting the market to grow next year but it will not be sustainable at its current level and will be much lower."
