The number of mortgages approved for house purchase jumped by 19 per cent during February and borrowers repaid a record amount of debt, the Bank of England said today.

The number of home loans approved for house purchase rose to 37,937, up from 31,791 in January, well above the six-month average of 31,500 and the highest level since May last year, the Bank of England said.

But consumers, concerned about the outlook for the economy and the threat of wage cuts or job losses also made the biggest net repayment of loans since records began in 1993.

Britons repaid £245 million pounds of consumer credit in February, compared with a net borrowing rise of £165 million pounds the month before.

Building Societies also reported a surge in receipts last month as consumers saved more money. Some £1,595 million was deposited in building society accounts in February - the highest February net receipt on record.

Commenting on the figure, Brian Morris, Head of Savings Policy at the BSA said: "The record February net receipt of £1.6 billion shows that building societies' attractive savings products are helping them to compete for deposits. Despite the Bank Rate being so low people are still keen to save, probably in response to the uncertain economic outlook and reduced job security."

Gross mortgage lending by building societies in February was £1,214 million, compared to £3,861 million in February 2008.

The positive mortgage figures prompted some economists to suggest that the worst could be over in the housing market as buyers re-enter the market to snap up property bargains. But Vicky Redwood, UK economist at Capital Economics, said that there would need to be a significantly bigger pick up in activity before house prices stop falling. House prices have tumbled by 20 per cent since the market peaked in summer 2007.

"Housing market activity may finally have turned a corner. This might suggest that the pick-up in new buyer enquiries is feeding through into actual activity. With new buyer enquiries still rising, this is clearly quite promising," she said.

"However, approvals have a long way to go before they get to levels that are no longer consistent with falling house prices."

This came just a week after initial signs that the US housing market, which has also been hit hard by the sub-prime crisis and resulting credit crunch, also showed signs of a pick up. Sales of existing homes jumped by 5.1 per cent last month, spurred on by first-time buyers snapping up foreclosure bargains.

More than 4.7 million homes were sold last month, including a 4.4 per cent rise in single-family houses and an 11.4 per cent jump in apartments.

Money Central: 10 towns where house prices are still rising

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive