Business borrowing rose by £2.5 billion net in September, the strongest monthly rise since 2009, said the British Bankers’ Association.

UK banks have reported their strongest month for growth in business lending and mortgage approvals since 2009.

Borrowing by non-financial firms recorded a net rise of £2.5 billion in September, marking the biggest monthly increase seen in four years, the British Bankers’ Association (BBA) said.

There was also further evidence that consumers are feeling more bullish, with 42,990 mortgage approvals worth £6.7 billion made to home-buyers in September, representing the largest total since December 2009. Re-mortgaging was also at a two-year high, with 23,087 home loans worth £3.5 billion approved by banks.

The rising mood of confidence was also reflected in people’s credit card spending, with consumers continuing a trend also seen in August of putting more on their credit cards than they paid back.

Some £8.3 billion worth of new spending was recorded on credit cards last month, which is above the average amount over the last six months, while £8.2 billion was repaid.

Overall, non-mortage borrowing by consumers increased by 0.6 per cent over the year, driven by a growth in credit card lending that outweighed a fall in personal loan and overdraft borrowing.

The BBA said demand for credit cards is “being stimulated by improving consumer confidence and the range of competitive offers available”.

Card providers have been battling it out in recent months with long-running zero per cent introductory offers.

BBA statistics director David Dooks said: “September’s figures build on the growing picture of improved consumer confidence, with stronger gross mortgage lending, rising house purchase approvals and increased consumer credit.

“Business borrowing rose by £2.5 billion net in September, the strongest monthly rise since 2009, reflecting increased demand from wholesalers, retailers and utility companies.”

The BBA’s figures also showed that borrowing by finance businesses grew by £7 billion in September, falling back from a £13 billion net increase the previous month.

It said that, despite the upturn in mortgage approvals, home owners are still making strong efforts to pay down what they owe on their home loans amid the low interest environment, meaning that overall mortgage borrowing remains “subdued”.

While the schemes to get the housing market going again have been credited with improving consumer confidence, they have also prompted concerns of a looming house price bubble

The latest mortgage figures were recorded just before the Government’s new flagship scheme to give would-be home owners with low deposits a helping hand was fired into action this month, which is expected to fuel housing market activity further.

State-backed lenders Royal Bank of Scotland (RBS), NatWest, Halifax and Bank of Scotland have all started offering loans to first-time buyers and home-movers with five per cent deposits under the new phase of the Help to Buy scheme, which can be used to purchase new or existing properties.

The initiative enables lenders to buy a guarantee from the government, covering up to 15 per cent of the property’s value, which will compensate them if the borrower defaults on the loan.

Other lenders including HSBC, Santander and Barclays have announced plans to come on board the scheme in the coming months, which should ramp up competition in the mortgage market further.

The deals on offer so far under the new phase of Help to Buy have received a mixed response, with the lenders offering them reporting strong interest from aspiring home-buyers, while experts have said the products are not hugely different from some mortgages which are already available outside the scheme.

Other government schemes such as Funding for Lending, which gives lenders access to cheap finance in order to help borrowers, have already helped to spark a mortgage price war and drive rates down to ultra-low levels.

The typical interest rate taken out by borrowers on new mortgages in the second quarter of this year dropped to a new low of 3.47 per cent, according to figures recently released by the Bank of England.

But while the schemes to get the housing market going again have been credited with improving consumer confidence, they have also prompted concerns of a looming house price bubble.

House prices reached a new record high of £247,000 in August, according to official figures, and property website Rightmove reported last week that house- sellers’ asking prices in London reached a new peak of £544,232 in October after recording an “unsustainable” 10 per cent month-on-month increase.