The number of house purchase loans leapt to nearly 78,000 in December, the highest since November 2007.
That is a 10% increase on November and a 40% rise on December 2012, according to the e.surv Mortgage Monitor, published today.
The 77,918 loans advanced to homebuyers last December was the highest figure for six years, and compares to just 55,501 approvals in December 2012.
Home loans were 10% higher than November's figure of 70,758. This was the 10th monthly increase in a row and the largest monthly increase in two years.
High-LTV lending rose 60% over the past 12 months, despite a 5% festive dip in December.
But it is still far below pre-recession levels, when there were four times as many high-LTV loans.
This suggests lending to borrowers with smaller deposits could still be ramped up significantly, said e.surv director Richard Sexton.
“There is still a long road to travel before the mortgage market is fully recovered from the hangover of the financial crisis. But the recovery is quickening, and the end is beginning to appear on the horizon.
"High-LTV lending has exploded in the past 12 months, and it is now far easier to take out a mortgage with a smaller deposit.
"There has been something of a festive dip in high-LTV lending in the last month, likely to be the result of lower equity borrowers paying for Christmas and delaying their move until the New Year.
"High-LTV lending should continue its recovery in the coming months, but it’s important that Help to Buy remains in place to help support borrowers in building a deposit, enabling them to access better rates, and cheaper deals.”
The recovery in lending accelerated sharply in the second half of 2013. House purchase lending increased just 6% in the first six months of 2013, against 32% in the second half of the year.
Sexton added: “While the first half of the year witnessed a moderate uptick in lending, with the seeds of the economic recovery beginning to sprout, the second half of 2013 saw the mortgage market grow at an electric rate.”
Figures from e.surv also showed house prices up 5.2% or £11,920 in 2013, the highest yearly rise since 2007.
The average property price rose £1,489 in December to £240,134, a new record for England & Wales.