New figures from the British Bankers' Association show that the total number of mortgage approvals rose to more than 82,000 in January, with approvals for purchases as opposed to for remortgaging or other secured lending at 49,972.
This represents the highest figure since September 2007, when the number of home purchase loans approved was 54,115.
Total mortgage lending by the BBA's members was 38 per cent higher in January than a year ago while the number of mortgages for home buyers which were approved, but not yet lent, was up 57 per cent.
Richard Sexton, director of e.surv chartered surveyors, said: "Demand is strong from the top to the bottom of the market. First-time buyers are keen to lock into cheap deals and get on the ladder. Help to Buy is encouraging renters to get onto the property ladder. In the North East & Cumbria and the North West in particular, the scheme is needed to help cash-strapped borrowers get on the ladder."
Adrian Anderson, director of mortgage broker Anderson Harris, added: "Mortgage lending is no doubt higher as a result of Government initiatives, but also on the back of other lenders following suit and matching the Help to Buy deals out there.
"Remortgaging is high, stimulated by the fact that Funding for Lending money has enabled lenders to offer some of the lowest ever five year fixed rates. A lot of buyers have been able to take advantage of that. Borrowers sitting on high standard variable rates have jumped off and switched to lenders with more competitive rates."
Aspiring homebuyers with a five per cent deposit now have three times more options than before the Help to Buy mortgage guarantee launched, according to Genworth, the mortgage insurance provider.
Simon Crone, Genworth Vice President – Commercial Mortgage Insurance Europe, said: "The combination of commercial appetite, government support and private insurance take-up has transformed the outlook for first time buyers and reignited competition for low deposit mortgages. Just six months ago, a five per cent deposit left potential buyers stranded with very few options to choose from. But a tide of new products has brought confidence flooding back and has already had a visible impact on the number of loans approved.
"Whether or not borrowers focus on the Help to Buy product range or look beyond it for more options, the scheme’s galvanising effect means there are now far more choices and far better rates at 95% LTV to end their wait for a loan. High LTV lending is good for the economy and, with improved funding markets and government support, it can become a powerful tonic to support the wider recovery."