Page last updated at 09:02 GMT, Wednesday, 22 April 2009 10:02 UK

Mortgage lending in seasonal rise

Burford in Oxfordshire
The rise may only be seasonal, lenders say

Mortgage lending picked up in March, according to figures from the Council of Mortgage Lenders (CML).

Gross lending stood at £11.5bn, up by 16% from February but still less than half the amount lent in March 2008.

Earlier HM Revenue & Customs (HMRC) figures showed there had been a 40% jump in home sales in March.

The CML said the March increase was a normal seasonal rise and warned that lending and house sales would remain low for the "foreseeable future."

Despite the jump in March, the lending figures for the first three months of the year were the lowest for any quarter since the start of 2001.

However Michael Coogan, director general of the Council of Mortgage Lenders (CML) said the latest figures were a step in the right direction.

"It's a seasonal factor here that people start to look around to move house in the middle of the better weather," he said.

"What we said at the beginning of the year was that we expected over the course of 2009, £145bn to be lent, and we are on track with that forecast, and that has to be compared with £363bn in 2007," he added.

Picking up

A growing number of indicators now suggest that sales may have hit rock-bottom after the dramatic slump of 2008, and could now be starting to rise.

The HMRC's figures showed 60,000 property sales in March worth at least £40,000 each, compared with 43,000 in February.

The number of mortgages approved but not yet lent, a key indicator of future activity, has also risen recently according to the Bank of England.

And during the past few months estate agents have been reporting a rise in the number of enquiries from potential buyers.

"House price activity is beginning to pick up to a limited extent in response to the substantial fall in house prices from their 2007 peak levels and markedly reduced mortgage rates," said Howard Archer, chief economist at IHS Global Insight.



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