Gross mortgage lending reached £11.3bn in March, a 21 per cent increase on £9.3bn in February, according to the Council of Mortgage Lenders.
The figure is 2 per cent down from £11.5bn in March 2010.
Gross lending for the first quarter of 2011 was an estimated £30.1bn, an 11 per cent decline from the fourth quarter – £33.9bn – and a 1 per cent decrease from £29.7bn in the first three months of 2010.
CML chief economist Bob Pannell says: “The housing market has emerged hesitantly from hibernation. Household finances are under a lot of pressure, and as a result demand for house purchase loans fell in the first three months of 2011. Lenders expect mortgage credit availability to improve this quarter, and this should help to underpin house purchase activity albeit at pretty low levels.
“Remortgage demand, meanwhile, continues to firm, presumably linked to expectations of higher base rates. Remortgage approvals in February were the highest for more than two years. Stronger remortgage activity looks set to continue propping up overall lending.”