Figures released by the Bank of England this week show the number of new mortgage approvals for home purchases were a seasonally adjusted 115,000 in November, up 2,000 from the previous month and at the highest level since May 2004.

The number of loans for remortgaging however, fell by 3,000.

The Bank said net lending secured on dwellings was £8.7 billion, this was £1.0 billion higher than in October and £1.2 billion higher than the previous six-month average.

Commenting on the figures, Andrew Smith for the Royal Institution of Chartered Surveyors said: "Compared to a year earlier, mortgage approvals are 53.3% higher, representing the largest annual rise since a 63.6% increase in December 1982."

"Mortgage approvals are also clearly above their average for the last decade of 100,000, strengthening the argument that the housing market in 2006 will see the first annual rise in activity since 2002, after three consecutive years of decline."

"The renewed interest in the market is evident not only through these mortgage approval numbers, but in the number of would-be buyers making enquires as captured in the RICS housing market survey, which rose for the sixth consecutive month in November."

"Robust employment conditions and rising earnings have helped to support housing demand despite a cooling in the wider economic climate."

"With interest rates likely to fall further in the next few months, we expect current firm market conditions to be maintained. As a result, mortgage approvals are likely to hit 1.33 million in 2006 compared to an expected total of 1.2 million for 2005, but still below the 2002 level of 1.42 million."