UK Mortgage Approvals Hit Highest Since September 2007 Amid Housing Recovery

Mortgage approvals for the purchase of a new home hit their highest level in over six years during January, according to figures from the British Bankers' Association, as they rocketed 57% across the year.

This sharp increase comes amid government efforts to make mortgages cheaper, such as the Help to Buy scheme, and a strengthening recovery in the UK economy.

The BBA said there were 49,972 mortgage approvals by banks in January for the purchase of a house, up from 47,086 in December. The total value of this lending was £8bn.

"Following on from last month, mortgage borrowing continues to rise compared to a year earlier as mortgage assistance schemes help first time buyers and housing chains more generally," said David Dooks, BBA statistics director.

"Approvals for new purchases have climbed quite significantly and are now at their highest point since September 2007."

Consumers are increasingly confident after the UK economy grew by 1.9% in 2013, its fastest rate since 2007, helping to lift demand in the housing market.

Under Help to Buy, the government offers two different packages of support for mortgage lending.

The first part is an interest-free loan for first time buyers worth up to 20% of the value of the property they want to buy. This is only valid for new build properties and up to a value cap of £600,000.

Help to Buy's second part is a government guarantee on offer to banks, for a fee, on part of their mortgage lending.

This has seen cheaper mortgage products offered to everyone, including first time buyers and existing property owners, also to a £600,000 cap on a property's value.