Loans to home buyers fell by eight per cent in October, despite the amount borrowers are paying towards interest rates hitting a historic low.
First-time buyers borrowed £4.5bn, a monthly decrease of eight per cent, and a year-on-year drop of two per cent, according to figures from the Council of Mortgage Lenders (CML).
However, at 17.6 per cent, the amount borrowers were paying to service this debt as a proportion of household income fell to a historic low.
The low cost of borrowing has been boosting remortgage activity, which came to £6.1bn in October, up 11 per cent month-on-month and seven per cent year-on-year. This amounted to 34,700 loans.
Following the hike to stamp duty taxes for second homes, landlords borrowed just £3bn, down 21 per cent on the same month last year. However, the figure was up seven per cent on September's.
Andrew McPhillips, chief economist at Yorkshire Building Society said the figures showed the "continuous rise in house prices which are beyond the affordability for many".
The lack of supply, which currently stands at a housing deficit of 1.2m in the UK, is driving up house prices, taxes and, consequently, the age of first time buyers.
Paul Smee, director general of the CML, said: "Buy to let house purchase lending remains weak following the change to stamp duty on second properties in April.
"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."