Homeowners borrowed more in January than in almost any month since the financial crisis, taking advantage of record low mortgage interest rates.
At the same time house price growth accelerated once more in February, defying expectations of a slowdown.
Prices rose by 0.6pc in the month with the average property last month costing £205,846 according to Nationwide, up 4.5pc compared with February of 2016.
It followed a surge in lending in January. A total of £21.8bn of mortgages were taken out during the month, up from £20.4bn in December and from £20.8bn in January 2016, according to the Bank of England.
Excluding March of last year - when the market was distorted by a rise in stamp duty for landlords - that is the biggest month for borrowing since May 2008.
The flurry of lending was driven by another drop in mortgage interest rates.
The average new mortgage loan in January came with an interest rate of just 2.05pc, down from 2.49pc a year ago and compared to 5.34pc a decade ago.
Existing homeowners took advantage of that by remortgaging, locking in the lower rates - a total of 47,155 such loans were approved in January, which is also close to a record high.
The number of new house purchases also increased according to the Bank of England, rising to 69,928 in the month, up 2.4pc on the month.
That is the highest number since March - when those tax changes came in and pushed the market into a frenzy - and indicates that much of the decline in the market following the stamp duty hike and the Brexit vote has now passed.
However, the housing market remains slightly slower than in January of last year, when 72,754 homes were purchases.
Analysts do not anticipate a major resurgence as rising prices are likely to squeeze household finances this year.
“The pick-up in mortgage approvals likely will run out of steam soon, given that mortgage rates have hit a floor and real incomes are set to stagnate this year,” said Samuel Tombs at Pantheon Macroeconomics.
“Indeed, the number of people searching online for ‘mortgage’ - a good leading indicator of approvals - has declined over recent months.”
At the same time credit card debt hit a new high of £66.6bn as shoppers continued to splurge.
Britons borrowed £15.6bn on the plastic in January, though they repaid most of it during the month, meaning overall credit card debt rose by £339m, just over half as much as they added to the debt pile in January 2016.
Credit cards account for just over one-third of all consumer debt - other unsecured debts amount to £127.3bn.
Headline interest rates on credit cards have barely moved in recent months although a competitive war between lenders has pushed out the interest-free periods on some cards.
Personal loans are also getting cheaper. The average £10,000 loan came with a rate of just 3.68pc in January, down from 4.29pc a year earlier and the lowest rate on record.
Traditionally personal loans have been very expensive. A decade ago a £10,000 loan came with an interest rate of more than 7pc while 20 years ago it was almost 14pc.
Despite the record debt levels, economists said the slower pace of growth indicated consumers may be becoming more cautious.
“This chimes in with the evidence of a step-down in sales on the high street and raises questions over the Monetary Policy Committee’s view that consumers will continue to borrow more or save less in order to offset the pressures from higher inflation,” said Martin Beck at the EY Item Club.
The Bank of England numbers also show net bank lending to businesses picked up by £3.7bn, an unusually sharp rise in the volatile index, driven by lending to large companies.
But economists are worried by the drop in lending to small firms.
“The suspicion is that businesses will become increasingly cautious in their behaviour (especially investment) over the coming months due to mounting concerns and uncertainty over the economic outlook as the UK’s Brexit process gets under way and consumer spending falters,” said Howard Archer at IHS Markit