Britain’s mortgage market saw a significant rise in lending in January, as homebuyers rushed to secure deals ahead of an upcoming tax change. According to the Bank of England, net mortgage lending surged to £4.21 billion in January, the highest level since September 2022, when financial turmoil shook the housing market.

This figure exceeded analysts' expectations, reflecting increased borrowing despite economic uncertainty. Mortgage approvals, a key indicator of future lending, declined slightly to 66,189 from 66,505 in December, but the drop was less than predicted.

The surge in mortgage activity is linked to the upcoming end of a temporary stamp duty reduction for first-time buyers and lower-priced properties. Experts suggest that falling mortgage rates and rising wages also contributed to the increase. However, analysts warn that the rush to beat the tax deadline may have peaked, leading to a slowdown in approvals in the coming months.

Meanwhile, consumer credit saw its biggest monthly rise in a year, indicating stronger spending confidence despite ongoing economic challenges.