Borrowing to purchase houses ticked up once more in October by 5% month on month, but it remained severely depressed compared to last year's levels, with lenders warning the housing market will be flat next year.

The Council of Mortgage Lenders’ (CML) latest report revealed gross mortgage lending totalled £13.5 billion last month, ahead of September's reading of £12.9 billion, but 27% lower than this time last year.

The rise in the last month is in-line with seasonal trends according to the CML. The organisation's economist, Paul Samter, urged people to treat the numbers with caution: 'The coming months are likely to be dominated by seasonal factors rather than underlying change.

'We expect only a modest improvement in the housing and mortgage markets next year, and it (the housing market) is likely to remain subdued as the economy gradually recovers.'

The CML - whose members account for 98% of all residential mortgage lending in the UK - said it had seen a pick up in house purchase activity, but this is being countered by a drop in the number of people remortgaging.

It said: 'Remortgaging has dropped to decade-low levels as many borrowers have little incentive to refinance when they move onto low reversion rates, and others find themselves unable to do so due to equity constraints.'

The CML also left its prediction for total gross lending on hold following October's figures. It still expects gross mortgage lending to total £141 billion in 2009, down from £253 billion in 2008.