Figures show that the net number of approved mortgage loans for house purchases rose from 51,500 in the previous month to 55,200 in January, marking the highest level in the past 15 months and exceeding economists' forecasts of 52,000. Additionally, the Bank of England noted that the effective interest rate on new mortgage loans fell by 9 basis points to 5.19% in January, marking the second consecutive monthly decline and reaching the lowest level since October 2023.

This data reflects the health of the housing market, indicating that the UK residential market is experiencing a resurgence as pressures from rising borrowing costs over the past two years ease. Furthermore, data released by the Bank of England also shows that consumer credit in January exceeded expectations, rising from £1.3 billion in the previous month to £1.9 billion, further indicating signs of spending recovery.

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Economist Ashley Webb from Capital Economics noted that the Bank of England's data suggests "the negative impact of rising rates on consumer spending and the housing market has eased." Moreover, the Bank of England's data shows that the average quoted interest rate for a two-year fixed-rate mortgage with a loan-to-value ratio of 60% decreased from 4.9% in the previous month to 4.62% in January, the lowest level since April 2023. Three-year and five-year fixed rates also continued to decline.

The Bank of England is expected to begin cutting rates from the 16-year high of 5.25% this year, leading to a decline in mortgage rates from their summer peak.

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Property agencies like Foxtons reported a 46% increase in inquiries for home purchases in January compared to the same period last year, with appointments for property viewings also rising by 36%. February data reports from relevant property agencies show an increase in the number of buyers across various regions of the UK, with London leading followed by the Northeast and Northwest regions.

The active market is likely to drive price increases, making it crucial to seize opportunities while rates are already beginning to decline. The increase in buying activity also underscores the issue of scarce high-quality properties in the market, making early market entry a wise choice for prospective homebuyers.

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