Highest level of new mortgage approvals since February 2008

UK mortgage approvals were at their highest levels for five and a half years at 66,735 in September, marginally over economists' estimates of 66,000. Last month's figure was 62,22.6.

The figure, reported by the Bank of England, provides, says IHS Global Insight's Howard Archer, compelling evidence that activity in the housing market was already gaining momentum even before the Help to Buy mortgage guarantee scheme was introduced in early October.

September's figure is still a long way off pre-crisis numbers - approvals between 2002 and 2006 averaged over 100,000 a month - but things are starting to pick up. Jeremy Cook, chief economist at currency brokers, World First, said that the 33.8 per cent increase in approvals since this time last year comes "amid a run by potential homeowners and investors to not miss out on an almost guaranteed near-term run higher in housing prices." Approvals numbered 49,848 in September 2012.

In addition to an improved market, buyer interest is being stoked by Help to Buy, and these latest figures will fuel concerns that house prices could "really take off over the coming months", says Archer. The swift action of policy makers "if signs of the housing market overheating become increasingly widespread and pronounced" is of "vital importance".

He adds that the chancellor's recent move to get the Bank of England's Financial policy Committee to annually monitor Help to Buy, and to advise whether the £600,000 price cap for poperties covered by the scheme and fees charges to lenders are appropriate, is a step in the right direction, but puts forward the case that advice at any time - throughout the year - could be more effective.

Net lending to individuals in August fell to £1.4bn, following expectations it would rise from July's figure of £1.6bn to £2.5bn.

Consumer credit for September missed expectations, coming in at £0.411bn (expected at £0.700bn) after August's figure of £0.620bn.