Banks handed out more money through loans and overdrafts in October than they had in almost a decade, The Times reports. The governor of the Bank of England Mark Carney recently sounded a warning on the level of household debt, while his chief economist, Andy Haldane, indicated that the central bank might intervene to quell demand.

These sentiments will be fuelled by the news that gross mortgage lending jumped to £12.9bn in October — 26 per cent up on a year ago and the highest level since August 2008. The number of loans for house purchases rose from 44,825 in September to 45,437 in October – a rise of 21 per cent.

Meanwhile, net lending for personal loans and overdrafts rose by £228m in October, the largest monthly rise since 2006. Net borrowing through personal loans has been growing at an annual rate of about 5 per cent over the past 12 months. Completing the picture, net borrowing by businesses rose by £600m in October, after falling by £1bn in September.

The mortgage data comes from the British Banking Association, whose chief economist Richard Woolhouse, said: "These statistics show that housing market activity remained strong in October. Consumers remain confident and their incomes are growing. Mortgage rates are at multi-year lows and people are snapping up the very competitive deals being offered by banks."

Hinting at the nature of a future BOE intervention on wider borrowing, Andy Haldane said this week: "Unsecured debt — by which I mean not so much credit card debt as personal loans — is picking up at a rate of knots. We've seen the cost of those loans fall very significantly over the course of the last year or two. That would be ultimately an issue that the financial policy committee might want to look at pretty closely, and I'm sure it will."

House prices: first-time buyers having to compete with landlords

Landlords switching their interest away from the expensive south-east and towards lower-value homes is threatening to make it even harder for young first-time buyers to get on the property ladder.

Data from brokerage the Mortgage Advice Bureau reveals that the ever increasing number of private landlords in Britain are now searching for homes outside of the south of England and in core first-time buyer value ranges, The Times reports.

It says in particular that 70 per cent of searches by those looking to secure a buy-to-let mortgage were for homes worth less than £250,000, with half of these for homes worth less than £150,000. Searches under these thresholds are up around 50 per cent year on year, meaning that most landlords are likely to be looking for homes worth less than the UK average. 

Buy-to-let investing has grown in recent years as the number of prospective tenants soars, with more and more people being priced out of owning for longer. Banks will also often lend more readily to landlords as the loans are lower risk – and the rapid growth rates in house prices make the option attractive to investors starved of yield elsewhere.

But the situation risks fuelling further price increases in core areas of the market and leaving even fewer opportunities for young people to buy their own home. Studies have claimed that more than half of under 40s will be renting within the next decade.

Today's data come follow the latest figures on house price growth, which revealed the average asking price has reached another record high. City AM says figures from estate agent group Haart showed prices surged 10.5 per cent year on year in October, meaning the average house is now worth £224,242.

Again, the estate agency found the focus is now on areas outside of London, which is falling behind in growth terms with a year on year increase of a little more than four per cent. The average price of a house in the capital is the highest in the country at £510,925.

House prices: mortgage lending reaches pre-crisis levels

Mortgage lending has risen by nearly 20 per cent in the past year, according to industry experts.

The Council of Mortgage Lenders says that a total of £21.8bn was lent in October, the highest amount since before the financial crisis in 2008. "The rise was partly triggered by competition in the mortgage market as lenders cut rates to meet their end-of-year targets by Christmas," says the Daily Mail.

With interest rates at historic lows, many people have been re-mortgaging their properties or seeking to move home in order to lock themselves into the low interest rates before they start to rise. But the small number of houses being offered for sale has caused an overall slowdown in the housing market in recent months – and this supply imbalance is widely cited as a key reason that house prices are surging.

Further evidence of the general upward trend comes from the Hometrack index of 20 UK cities, which says the pace of inflation will return to double-digits by the end of the year. The Times reports that prices in the UK's urban centres "leapt by 9.4 per cent in the year to November to an average of £229,300, up from 8.4 per cent in October and 6.6 per cent in May".

While the Hometrack index confirms that London and the university cities of Oxford and Cambridge are still out in front, national growth is also being driven by cities outside southern England that have recovered more slowly from the post-crisis slump. "Glasgow, for example, was up by 8.3 per cent at £110,500, while in Manchester it was seven per cent higher at £141,200, both the highest rates of annual house price growth since 2007," the Times notes.

The plight of younger buyers hoping to get onto the property ladder remains a serious concern. Third-quarter mortgage data suggests that mortgages for private landlords are growing at more than four times the pace of first-time buyer mortgages. Separate statistics published by the House of Commons library found that a first-time buyer needs an average deposit of £47,000 and an income of £55,000 to afford one of the government's new starter homes across the country – a financial position that effectively locks most young people out of the housing market.

In total there are 11.1m mortgages in the UK, amounting to a debt of around $1.3tn.

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