THE number of mortgages given the green light by UK lenders rose to a 15-month high in January, adding to signs that the housing market is gathering momentum.

Banks and building societies approved 55,227 home loans, up from 51,506 in December, the fourth straight monthly increase, according to data from the Bank of England. The figure was far higher than the 52,000 forecast by economists.

The figures suggest a recent pick-up in activity in the property market has further to run after largely stagnating in 2023 in a more resilient than expected performance.

Recent surveys have suggested that buyers are being enticed back into the housing market by lower interest rates, leading to stronger sales. Economists expect data from Nationwide Building Society on Friday (Mar 1) to show house prices growing year on year for the first time in over a year.

However, a cooling in mortgage rates from the 15-year highs hit last summer has stalled in recent weeks. Investors have pushed back expectations of interest-rate cuts by the BOE until August.

The average two-year fixed mortgage rate has crept up to 5.74 per cent since falling to a low of 5.55 per cent in late January, according to Moneyfacts.

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The BOE also said that consumers took out £1.88 billion (S$3.2 billion) on unsecured credit such as credit cards, up from £1.26 billion the previous month and well above the six-month average in a further sign that households are growing in confidence as wage growth outstrips inflation. A figure of £1.5 billion was forecast by economists. BLOOMBERG