Mortgage lending saw a record uplift earlier this year as better access to loans and ultra-low rates helped the housing market revival to gather pace.
The typical interest rate taken out by borrowers on new home loans dropped in the second quarter to a new low of 3.47%, figures released by the Bank of England and the Financial Conduct Authority (FCA) showed.
They revealed that the total value of new mortgages advanced rose by almost one quarter (23%) on the first three months of this year to reach £41.6 billion in the quarter.
While it is usual to see mortgage lending increase as the spring months move into early summer, this is the biggest percentage jump seen for that time of year since records began in 2007, the report said.
The findings are taken each quarter from around 300 mortgage lenders and administrators from across the UK to look for trends in the housing market.
In a sign of what is to come, lenders reported that they have approved £47.5 billion worth of loans to be advanced to people buying a house or re-mortgaging in the coming months, marking the highest quarterly figure seen since autumn 2008.
A string of reports in recent months have reported a burst of activity returning to the housing market following the launch of Government schemes such as Funding for Lending, which have prompted much wider mortgage availability as well as a price war among lenders. Some experts have raised concerns that the initiatives could eventually lead to a house price bubble, with borrowers overstretching themselves.
The findings were released on the same day that the the Royal Institution of Chartered Surveyors (Rics) reported that a balance of 40% of surveyors saw house prices rise rather than fall in July, marking the highest proportion recorded in almost seven years.
Initiatives such as Help to Buy and NewBuy have also been recently introduced to give borrowers with smaller deposits a helping hand. Today's FCA/Bank of England figures showed that one in 40 (2.5%) mortgages advanced in the second quarter were to people with deposits of less than 10%, compared with one in 48 mortgages (2.1%) a year ago.
The value of loans handed out to first-time buyers has risen by almost one third (31%) over the last year, to reach £8.0 billion in the second quarter.
Lending to buy-to-let investors has also risen by nearly one third over the last year, with £5.0 billion worth of loans advanced in the second quarter. Many landlords have been attracted to the market by decent returns to be made.
Letting agents have reported that in the rental sector from has remained strong as housing is generally in short supply, despite the recent increase in people who are making the jump onto the property ladder.
Commenting on the figures, Mark Harris, chief executive of mortgage broker SPF Private Clients, said cheaper mortgage rates are encouraging many borrowers to "take the plunge".
He said: "Growing confidence in the housing market as prices rise, particularly in London and the south-east, is also stoking the market."
The new figures also showed that the number of home owners falling into arrears is at a record low since the series began. There were 32,500 new arrears cases in the second quarter of 2013, marking a 12% drop on the first quarter.