The number of UK mortgage approvals in September was up seven per cent from the same time last year to 41,584, according to figures from trade body UK Finance.
Overall mortgage lending in September was also up almost five per cent to £21.4bn, two thirds of which came from high street banks.
Customers appeared to be attempting to “lock in” current low mortgage rates, as an interest rate hike by the Bank of England is expected before the end of the year.
“Mortgage lending has grown modestly since the start of the year and is heading towards the levels last seen in 2008,” said John Eastgate at OneSavings Bank.
“With a rate rise in the offing, however, borrowers may well have to face up to the reality that they’ve missed the opportunity to secure the lowest mortgage rates in history.”
UK Finance noted that momentum in the housing market was being helped by an increase in first-time buyers. Remortgaging was also high, noted Legal & General Mortgage Club's Jeremy Duncombe.
However Duncombe added that the Budget next month needed to address housing supply issues with a comprehensive plan of action.
Despite the positive headline figures, there was a slight dip in mortgage approvals compared to August's figures.
Howard Archer, chief economic advisor to EY's Item Club, said this “reinforces our belief that there is unlikely to be a sustained, significant upturn in housing market activity any time soon”.
“Buyer enquiries fell for a sixth month running and were at the weakest level since July 2016. Alongside this, agreed sales fell and were also at the weakest level since July 2016,” he added.