The number of new dwellings on which construction started rose to 197,170 in 2016-17 across the UK - up from 175,290 in 2015-16 - according to the figures from the Ministry of Housing, Communities and Local Government (MHCLG).
The number of new homes completions also rose, to 178,450, up from 169,170 the previous year, according to the statistics.
But both figures are still below the annual start and completion figures achieved in the mid-2000s, the statistics show.
Meanwhile, the latest planning application figures, also released today, show that in the year ending December 2017, district level planning authorities granted 6,500 major permissions for major housing development - classed as comprising ten or more homes or a site area of 0.5 hectares or more - and 43,100 minor permissions for residential, up by three and one per cent respectively on the year ending December 2016.
The planning application figures show that permission for 338,000 homes was given in the year to 31 December 2017, eight per cent higher than in the year to the end of December 2016.
But the number of permissions granted for commercial developments, at 10,200, was down nine per cent on the year ending December 2016.
"It’s good to see housing starts and completions at their highest level since 2007, and planning permissions up eight per cent on last year," said housing and planning minister Dominic Raab.
"But we are restless to do more. We’re reforming planning rules, releasing government land and investing £5 billion in infrastructure to build the homes Britain needs, and make them more affordable for working people in this country."
Commenting on the figures, Jason Lowes, a partner at consultants Rapleys, said the figures show that "things seem to be moving in the right direction."
"It strongly suggests that developers are not holding back from delivering housing", he said.