UK mortgage approvals grew to a four-month high in December, signifying that the housing market is ready to harvest heavy gains in 2016. The mortgage approvals jumped to 70,837 from 70,424, in the previous month, the Bank of England said.

Financial experts had anticipated a fall to 69,600, according to Bloomberg News poll. Net mortgage lending amounted to GBP 3.2 billion in December 2015, down from GBP 3.8 billion last month. Consumer credit rose 0.7% or GBP 1.2 billion in December from the previous month.

Bloomberg said that the lending to business dropped GBP 3.7 billion, with loans to smaller firms falling GBP 299 million, which is the highest fall since December 2014. However, net lending to individuals increased GBP 4.4 billion in December 2015.

M4 money supply dropped 0.2% from the prior month but climbed 0.2% compared to the similar period in 2014. On an underlying basis, M4 money supply slowed to growth of 4% on a three-month annualized basis.

Foreign investors sold a total of GBP 1.7 billion of gilts during December, compared with a total purchase of GBP 13 billion in the previous month, according to Bank of England. UK manufacturing increased in January as local demand balance the poor performance in export during seven months, Bloomberg said citing a report.

According to Reuters, UK housing prices increased strongly in December, boosted by low borrowing costs as well as record employment rate. The British Bankers' Association announced a seven-month low in mortgage approvals while other polls point to a strong realty price inflation. UK's financial recovery depend highly on households' expenditure.

Factories in UK had a brighter beginning to the year than it was anticipated, however firms reduced workforces at the speediest rate in 3 years, Reuters said citing a survey report. Export rate also decelerated at the fastest rate, though sterling fell 3% last month.

Latest indicators for the real estate market had hinted at a decline in property prices, but the robust mortgage data, combined with UK's shortage of dwelling supply is likely to confirm that the housing price will increase quickly during 2016, MarketWatch said.

David Whittaker, MD of Mortgages of Business, said "But the next few months are likely to be very different. The next wave of activity will be powered by landlords scrambling to complete transactions before they are hit with extra taxes. This is only just beginning."

Peter Williams, a director of Intermediary Mortgage Lenders Association, said that December was the fantastic month for remortgaging, with economic activity developing as speed as overall approvals. This speed in remortgaging signals the eagerness of property owners to take advantage on housing market competition.