The number of mortgage approvals granted to home buyers by Britain's high street banks lifted to a six-year high in December in a further sign of blossoming consumer confidence.
The British Bankers' Association (BBA) said that across 2013, mortgage borrowing reached its strongest level since 2008, as Government initiatives such as Help to Buy helped to inject more first-time buyers into the market and free up housing chains.
Some 46,521 approvals for house purchase worth £7.7 billion got the green light in December, the highest monthly total since September 2007 and an increase of over two-fifths (42%) compared with December 2012.
The BBA said that gross mortgage borrowing of £110 billion in 2013 was a fifth higher than in 2012 and the highest annual total since 2008.
BBA statistics director David Dooks said: "These figures show that mortgage lending grew strongly towards the end of last year.
"This provides further evidence of a more active housing market, helped by growing consumer confidence and Government support schemes such as Help to Buy."
The scheme offers state-backed mortgages to creditworthy people who have had a tough time trying to move on to the property ladder or up it because they only have a small deposit.
Matthew Pointon, a p roperty economist at Capital Economics, said the BBA's figures "may increase concerns that the mortgage market is heading for another unsustainable boom".
"But while a possibility, we doubt that is the most likely outcome. Banks show no signs that they are about to start engaging in the kind of lending practices that characterised the mid-2000s credit boom."
Mr Pointon said toughened mortgage rules due to come in this April are likely to "keep a lid on lending".
The new rules aim to prevent any return to irresponsible lending and mean that lenders will have to consider not only whether someone can afford their mortgage repayments now but also when interest rates eventually start to rise.
Meanwhile, the BBA said non-mortgage borrowing increased by 0.1% over 2013. Within this figure, growth in card borrowing of 4.2% outweighed a fall of 3.5% in borrowing on personal loans and overdrafts.
December saw a seasonal rise in people dipping into their overdrafts. A £566 million net increase in overdraft borrowing during the month was recorded.
But there was also evidence that some cautious consumer behaviour remains. Despite the run-up to Christmas, consumers paid back slightly more on their credit cards in December than they put on them in new spending.
Some £8.1 billion of new spending on credit cards was recorded in December, while £8.2 billion was made in repayments, reversing a trend seen in recent months when consumers spent slightly more than they paid back.
On average in each of the previous six months, people spent £8.2 billion on their credit cards and made £8.1 billion in repayments.
The BBA's figures also showed that net borrowing by non-financial businesses decreased by £650 million in December, while net borrowing by financial businesses fell £25.7 billion.
The report said that although business borrowing continues to contract overall, the manufacturing sector has started to see positive annual growth in borrowing.
Howard Archer, chief UK and European economist for IHS Global Insight, pointed out that a Bank of England report recently reported a "significant" increase in credit availability to firms in the fourth quarter of 2013, with a further increase expected in the first three months of 2014.
He said: " As demand for credit does pick up, it is vitally important for healthy and more balanced UK growth that all companies who are in decent shape and who do want to borrow - whether it be to lift investment, explore new markets or generally support their operations - can do so."
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