Figures from the Bank of England show the number of new mortgages approved by lenders rose to a 15-month high of 107,000 in September, up less than1% from the revised figure of 106,000 in August but providing further evidence that the housing market is beginning to recover after August's cut in interest rates.

Approvals are new mortgages approved by lenders, but not yet lent and are a good indicator of future trends.

Compared to last year, mortgage approvals are now 24.4% higher, contrasted with the dramatic fall of 42% last November. Mortgage approvals in August are now clearly above their average over the last decade of 99,000 per month and have risen by 40.8% since the low point of 76,000 in November of last year.

"The Bank of England figures confirm that a gradual recovery in housing market activity was maintained in September," said RICS economist, David Stubbs. "Household confidence has held up in the face of a mild economic slowdown, thanks in part to August's interest rate cut which has boosted confidence in the market."

"The renewed interest in the market is now evident, not only through these mortgage approval numbers, but in the number of new buyers enquires, which rose for the fourth consecutive month in September. In addition, transactions recorded by the Land Registry have picked up sharply in recent months."

"However, the small size of the increase in mortgage approvals from last month could signal that the rise in activity precipitated by the interest rate cut may be close to peaking."