Gross mortgage borrowing of £10.8bn was 38% higher than in the same month last 14 year, although January was slightly down on December, the British Bankers’ Association (BBA) has revealed.

The trade group said that mortgage borrowing assistance schemes are helping first-time buyers and housing chains generally, as housing market activity rises.

Compared to the same time a year earlier, January 2014 approvals up for house purchase(57%) and remortgaging (51%) but down for other types (-2%).

January’s total for house purchase approvals is the highest since September 2007.

Higher capital repayment (in part reflecting homeowners switching lenders) produced monthly contractions in net borrowing through much of 2013, but in the last few months, the overall mortgage stock has started to rise.

BBA statistics director, David Dooks said: “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. Approvals for new purchases have climbed quite significantly and are now at their highest point since September 2007.

“Credit card spending is also on the rise, showing that consumer confidence in the economy continues to improve.”