LONDON (Reuters) -British lenders approved more mortgages in January than at any point since October 2022 when the housing market sagged amid former Prime Minister Liz Truss's "mini-budget" crisis, adding to signs of recovery in activity.
Bank of England data on Thursday showed 55,227 mortgage approvals last month, up from 51,506 in December, the data showed. A Reuters poll of economists had pointed to 52,000 approvals during January.
Several gauges of Britain's housing market, including house prices, have pointed recently to renewed growth.
Still, economists and housing market analysts are sceptical that this represents the start of a more durable upswing.
A Reuters poll of analysts published earlier on Thursday showed British home prices are expected to flatline this year as the wider economy struggles to produce meaningful growth.
But the BoE data showed a bigger-than-expected increase in consumer lending, which rose by 1.88 billion pounds in net terms - topping forecasts in the Reuters poll which had pointed to 1.6 billion-pound rise.
The annual consumer credit growth rate ticked up to 8.9% in January from 8.6% in December - the highest reading since August 2018 although it was inflated by the sharp rise in consumer prices over the last year.
British house prices, like those in many other rich countries, surged during the COVID-19 pandemic, rising by more than 25% according to official data.
But transactions slowed sharply in late 2022 after Truss' budget plans caused turmoil in bond markets and pushed up the cost of mortgages. Increases in BoE interest rates also acted as a brake through 2023.