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The number of mortgage approvals to home buyers edged upwards month-on-month in December, according to Bank of England figures.
Some 66,526 deals got the green light, up from 66,061 the previous month.
Nathan Emerson, chief executive of Propertymark, said: “Many people are likely to have been working with urgency to get their mortgages approved to help ensure they can complete ahead of stamp duty threshold increases in England and Northern Ireland before the start of April.
“It has been an upbeat start to the year overall.”
We do expect lenders to cut mortgage rates as soon as they are able to do so
Hina Bhudia, Knight Frank Finance
Property website Zoopla said on Thursday that house sales and property listings were higher at the start of this year than in early 2024, with 2025 being the strongest start to the housing market in three years.
Hina Bhudia, a partner at Knight Frank Finance, said: “Mortgage rates have been largely steady during the early weeks of the year, though a handful of lenders did reprice a little higher during the bond market volatility.
“That volatility has since eased and we do expect lenders to cut mortgage rates as soon as they are able to do so.
“They have fresh lending targets at the beginning of the year and are eager to build market share.”
Jason Tebb, president of OnTheMarket, said: “While affordability remains an issue for many buyers, there is encouraging talk of further base rate reductions this year.”
Looking at non-mortgage borrowing, the Bank’s Money and Credit report showed that annual growth for consumer credit decreased slightly to 6.5% in December, from 6.6% in November.
The rate for credit card borrowing increased to 8.1% from 8.0%, while other forms of consumer credit – including car dealership finance and personal loans – slowed to 5.8% from 6.0%.
Easing inflation and robust wage growth may be improving disposable incomes for some, but not everyone is managing to balance their household finances effectively
Alice Haine, Bestinvest by Evelyn Partners
Households’ deposits with banks and building societies increased by £4.5 billion in December, following net deposits of £1.2 billion in November.
Karim Haji, global and UK head of financial services at KPMG, said: “Consumer confidence remained suppressed in December due to the uncertain economic outlook.
“Some households will not have had a positive financial start to 2025 and with conditions set to remain challenging, lenders will need to be ready to provide the necessary support, particularly in debt and budget management.”
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, said: “When consumer confidence is low, people can feel uncomfortable taking on extra credit.
“Easing inflation and robust wage growth may be improving disposable incomes for some, but not everyone is managing to balance their household finances effectively. Those turning to credit to stay on top of the bills or relying on credit cards to get by are likely to be dismayed to see the cost of servicing debt still so high.
“Borrowers with heavy credit card debts or large overdrafts could consider taking advantage of 0% balance transfer or spending credit cards to reduce interest payments.
“Alternatively, reining in expenditure, contacting creditors about money concerns and building up an emergency pot to cover surprise household expenses are all effective strategies to shield finances from the challenging conditions.”
