Gross mortgage lending surged 38% in the past year to hit £13.6 billion last month, the highest figure for nearly eight years.

The number of mortgage approvals in January was 33% higher than a year ago, with remortgaging up 42% and house purchase up 27%, according to the latest high street lending figures from the British Bankers’ Association.

Adrian Anderson, director of mortgage broker Anderson Harris, said borrowers are exuding confidence, incomes are rising and lenders are keen to lend.

“There has been a significant rise in mortgage borrowing but the market is far from racing away with itself.

“For many borrowers, tougher affordability criteria is still a barrier to getting a mortgage or remortgaging.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said with Bank of England governor Mark Carney refusing to rule out a cut in interest rates, borrowers do not need to fear a rate rise anytime soon.

“Mortgage rates are cheap and some of the more popular ones such as five-year fixes are likely to become even more competitive as lenders compete for business. This is excellent news for borrowers.

“Challenger banks keen to lend have helped push rates down to record lows. With a number of lenders such as HSBC and Tesco Bank lending via select intermediaries for the first time, borrowers are also finding there is much more choice out there.”

Harris said the biggest hurdle is qualifying for today’s great mortgage deals. “Tighter affordability criteria as a result of the Mortgage Market Review mean certain groups are finding it more tricky, such as older borrowers, the self-employed and those requiring interest-only mortgages.”

Brian Murphy, head of lending at Mortgage Advice Bureau, said growth has been driven in part by a growth in demand from buy-to-let investors looking to access the market ahead of April’s changes to stamp duty.

“Policymakers need to work hard to ensure that first-time buyers and borrowers with modest incomes are supported, and that homeownership is achievable on a wider scale.”