Mortgage approvals have hit their highest level since February 2008, while total household debt reached a new record last month, according to the Bank of England.
The Bank said 67,701 home loans worth £10.5bn were dished out in October - just 24 hours after confirming that its Funding for Lending Scheme (FLS) would no longer support mortgage borrowing from January to help prevent the market overheating and future debt risks.
It also highlighted rising consumer debt levels in separate figures which reflected concern over the property market, as total household debt hit a new high of £1.43trn in October.
The figures add weight to fears of a "perfect storm" for the economy amid unsustainable debt levels, rising prices and low wage growth.
Earlier this week, the Money Advice Service reported that only a fraction of the nine million people with serious debts were getting help.
People concerned about debts are advised to seek free help from charities Nationwide said earlier on Friday that a monthly house price increase of 0.6% in November took average UK values to £174,566 from £173,678 in October, although prices were still around 6% below their 2007 peak.
A shortage of property on the market and incentives to help borrowers under Government schemes such as Help to Buy have been cited as reasons for national price growth, though it has been largely driven by soaring values in London and the South East.
Yesterday, the Bank of England took the first step in putting the brakes on the property market as it scrapped an initiative that has had a significant part to play in encouraging mortgage lending.
Governor Mark Carney said the FLS stimulus would instead focus purely on helping small business borrowing, which remains muted.
FLS has offered lenders access to cheap finance on condition that they pass on the benefits to borrowers, and experts yesterday said the Bank's move could spell the "beginning of the end" for ultra-cheap mortgage deals.
Nationwide provides a respected monthly report on house prices Fears of a looming property bubble have been growing in recent months amid a string of reports suggesting demand in the housing market far outstrips the growth in the supply of homes.
The latest phase of Help to Buy, which offers state-backed mortgages to people with deposits as low as 5%, was launched in October.
This is expected to inject further activity into the market among credit-worthy buyers who have particularly struggled to get on the housing ladder or move up it since the financial crisis struck because they have a lack of upfront funds.
Lenders representing around two-thirds of the mortgage market have committed to coming on board the scheme and there are also signs of competition increasing to attract low-deposit borrowers from lenders which are outside the Help to Buy scheme.
The expansion in mortgage lending comes at a time of growing concerns about wider household debt, which hit a new high of £1.43trn in October - slightly above the total registered in 2009.
But the bank's figures showed a sharp drop in growth of consumer credit, made up of lending on credit cards, personal loans and overdrafts - growing by £457m over the month, halving a £1.1bn rise the previous month.
Experts suggested the figure was a sign that people remain wary of taking on more debt, despite some evidence of increasing confidence in recent months.
Matthew Pointon, a property economist at Capital Economics, said the mortgage lending and credit figures suggested that household finances were "not strong enough" to support a countrywide house-price boom.
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