Mortgage lenders have reported their strongest month in almost five years, in further evidence that the housing market is bursting back into life.
An estimated £16.6 billion worth of mortgages were advanced to borrowers in July, marking the highest total seen since October 2008, the Council of Mortgage Lenders (CML) said.
This means that mortgage lending has soared by almost one third (29%) compared with the same month last year, as well as climbing by 12% on the previous month.
The figures are the latest in an avalanche of reports which have pointed to a housing market revival, with some particularly strong evidence of this seen in recent weeks.
Last week, the CML, which represents banks and building societies, reported that first-time buyer numbers have risen to their highest levels since 2007, while the Royal Institution of Chartered Surveyors (Rics) said that house prices are rising at their fastest rate since 2006.
Meanwhile, asking prices on flats have reached an all-time high, property search website Rightmove reported yesterday. It put this down to strengthening demand for this type of property from people who are trying to take their first step on the property ladder as well as buy-to-let investors who are also being encouraged into the market by reports of decent returns to be made.
Asking prices in London are up by 10% compared with a year ago as confidence flows back into the market, according to Rightmove's findings.
CML market and data analyst Caroline Purdey said the body's lending figure for July reinforces "a growing evidence base of a strengthening in the housing and mortgage markets".
Government schemes such as Funding for Lending have been credited with boosting activity by widening mortgage availability. Initiatives such as NewBuy and Help to Buy have also been launched to give those with smaller deposits a helping hand.
The strength of the uplift in house prices seen already this year has taken some experts by surprise.
Particular concerns have been raised about the potential for a house price bubble to be created following the second phase of Help to Buy, which from next year will underwrite £130 billion of low-deposit mortgage lending with state guarantees.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Borrowers must not get carried away, buy sensibly and take care not to overstretch themselves, whether they are planning to live in the property or rent it out."
He said that despite the strong uplift reported today, the housing market recovery will be "long and slow".
He added: "Lending levels are still running at a fraction of what they were at the height of the housing boom."
There have also been calls for the Government to step up its efforts to build more homes as activity lifts. H ousing charity Shelter recently warned that less than half the houses are being built in England each year than are needed to tackle the "chronic shortage of homes".
Housing Minister Mark Prisk said: " Today's figures show our Funding for Lending Scheme, and record low interest rates, have led to the highest level of mortgage lending since 2008.
"But alongside this, we're also pulling out all the stops to get Britain building, and the increased availability of mortgage finance is boosting confidence in the housing market, and encouraging housebuilders to invest in building more new homes.
"We've also been working with the mayor to invest billions of pounds to deliver the fastest rate of affordable housebuilding for two decades. And it's why we're freeing up councils to make it easier to convert existing unused buildings into new, much-needed homes."