Bank of England governor Mark Carney is concerned about the "potential" for a bubble forming in the housing market but has vowed to action to prevent it - if need be.
"There is a history in the housing market of moving from stall speed to warp speed," he said. "We want to avoid that."
His speech in New York last came as the Royal Institution of Chartered Surveyors (Rics) reported that in November more its members expected house prices to rise in the coming three months than at any other time in the past 14 years.
However, while the housing and mortgage markets are set to get busier in 2014, “an unbridled housing boom” is “unlikely”, according to the Council of Mortgage Lenders (CML).
The CML says the volume of business brought in through the Help to Buy mortgage guarantee scheme may be relatively modest, "such that it has a smaller but more positive market impact than many commentators suggest".
Indeed, it suggests that stretched household finances, new regulations that come into effect in April and the gradual uptick in interest rates are all expected to act as a break on the housing market throughout the course of the year.
Rics also said that the removal of the Funding for Lending Scheme for residential mortgages from the end of December could have “some impact on the number of people able to purchase a home”.
The CML believes gross mortgage lending could hit £195 billion in 2014 – up 15% from around £170 billion this year. By 2015, it could rise another 5% year-on year to £206 billion.
The number of mortgages in arrears by 2.5% or more is likely to stay stable in 2014 next year at around 150,000, but rise modestly (7%) to 160,000 the following year.
However, the CML forecasts the number of repossessions to fall from around 30,000 this year to 28,000 in 2014, before creeping back up around 30,000 in 2015 if mortgage rates edge higher, as expected.
The CML added that “most households will cope with the transition to more normal interest rates”.
CML chief economist Bob Pannell said: "Gross mortgage lending climbs above £190 billion next year, its highest level since 2008. While this is largely on the back of the continuing revival in housing market activity, we also expect to see a meaningful turn-round in remortgage activity.”
He added: "We think there are good grounds to be optimistic that the vast majority of households will cope with a slow but certain transition to more normal interest rates. This seems to be the game-plan which the Bank of England has in mind, but presumes (as we do) that the UK avoids a destabilising housing boom over the next few years."