MORTGAGE lending picked up in January, Bank of England figures showed yesterday fuelling hopes of a recovery in the housing market this year.

Demand for home loans increased on all measures, reinforcing anecdotal evidence from estate agents and buildings of a buoyant start to 1996.

Gross lending totalled a seasonally adjusted £5.166 billion compared with £5.022 billion in December and £4.666 billion in January 1995. Net lending, which strips out the effects of remortgaging activity, totalled £1.320 billion, up from £1.159 billion in December and £1.315 billion a year earlier.