The stamp duty amnesty is about to end and first time buyers are quick to get the deal before this happens this has meant that lending has increased by 10%.
The Council of Mortgage Lenders (CML) said banks and building society's lent £10.5billion in January; this meant that year on year figures had rose for the last consecutive 6 months.
CML said Januarys figures was due to improved sentiment in the housing market, the figure was 14% less than December due to seasonal factors.
Stamp duty for first time buyers purchasing a property under £250,000 has been free however this is only until the 24th March and the industry believes this is what has boosted sale.
The CML said in January 2011, a total of £9.5billion was lent in mortgages.
Bob Pannell the chief economist for CML said: 'Should inflationary pressures continue to fall back, the squeeze on household finances should ease progressively and help support stronger economic recovery going into the second half of the year.
'This can only be good news for the housing market further down the track.'
Though the recovery seems remarkable, it must be seen in context as to how deep the market had sunk.
Record low mortgage rates were on offer last year and yet the property market froze and people purchasing their homes were at the lowest they had been for 27years.
In 2008 and 2009 the property slump, house prices were falling at 20 per cent annually and yet last year mortgages fell below even when that was happening.
A report from the Royal Institution of Chartered Surveyors claimed more new home owners were on the increase and that they believed this was because the stamp duty amnesty was coming to an end.
Though it said many members were optimistic for the coming months: 'Many problems with the market still exist and the lack of affordable mortgage finance is still preventing many from getting onto the property ladder.'
House prices are now registering small yearly falls, but the property market itself still remains bleak, this is because potential buyer are still scared with large deposits required , tight credit checks and fear over the economy.
CML reported that the residential property market fortunes were different from the buy- to- let reporting that land lord mortgages were up 20% last year.
The housing market is not entirely reflected on the mortgage figure. Last year the CML estimated that approximately 40 % of sales were cash buyers. Up from around 15% in 2005.
Some cash buyers are developers, some are older and have equity in their existing property and want to downsize, investors or foreigners.
A recent report from upmarket estate agent Savills believes that people paying for their property with cash could be higher. It claims that 54% of homes are now bought with cash.
Mortgage debt, unlike credit cards and personal loans, is secured against your property. Often people encounter mortgage debt problems because of their unsecured debts. The credit cards, payday loan and personal loans will telephone you more frequently to ask why they haven't been paid. The result mean you don't have enough to pay for your mortgage.
Your mortgage and council tax are just some of your priority debts. These must be paid first. By dealing with your unsecured debts you will in turn resolve your mortgage debt problem. If you would like to speak about a specific debt problem you can contact Debt Support Trust on 0800 085 0226.
If you fail to keep up repayments on your mortgage then it could be repossessed.