The Council of Mortgage Lenders has revealed the number of loans advanced for house purchase rose 12% in February after an "extremely weak" January.
The 35,000 loans in February represented £5bn worth and, despite the jump, only marks a modest recovery, with January affected by one-off factors such as the end of the Stamp Duty holiday in December 2009 and the severe weather.
Nevertheless, February was up 49% in volume and 67% in value on the same month last year.
First-time buyers increased faster than the rest of the market in February, due to many avoiding the housing market after the end of the Stamp Duty exemption. Figures rose by 13% to 12,600 loans and 15% by value to £1.5bn on January.
Homemovers were less affected by the stamp duty holiday, yet the number of transactions did rise 11% to 22,600 and by 6% in value to £3.5bn.
Remortgaging figures rose for the first time in five months, yet activity remained weak with an increase of just 2% to 24,000 loans in February. The CML expects remortgaging to stay weak for some time to come.
Fixed-rate mortgages also continue to be less popular than in recent years, with their lowest share in five years. Fixed rates made up 47% of mortgages in February, unchanged from January.
By comparison, tracker mortgages' share of the market has remained at its highest level since the CML began recording this data in March 2005, retaining 36% of the market, also unchanged from January.
Bob Pannell, head of research at the CML, says: "With the supply of credit still tight and the upcoming election causing political uncertainty, we are unlikely to see much change in the near future although the new Stamp Duty exemption for first-time buyers could boost the market somewhat and we hope to see the traditional seasonal pick-up as the weather gets warmer and the days get longer.
"The start of the year is traditionally a quiet period for mortgage lending. This year though, transactions have been affected by the ending of 2009's Stamp Duty concession and the harsh weather, making it hard to identify clear trends in recent months."
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