Lending up marginally in February

Loans for house purchases rose to 24,300 in February, up by 4% compared with January. The CML warned that activity in the market was still at a "very low level historically."

Remortgaging dropped off with 35,000 remortgage loans, down from 44,000 in January - a decline of 20%. The body predicted demand for remortgaging to remain low because lenders' SVRs remain attractive compared to new mortgage deals, adding that house price falls continue to erode equity levels which will exclude some borrowers from the best remortgaging deals available to those with large deposits.

Loans to first-time buyers increased by 7% to 9,400, although significantly less than the 17,400 in February 2008.

Michael Coogan, director general of the CML, said figures published by the Bank of England showed some signs of improvement at the beginning of the borrowing process, although activity was at a very low level historically.

"We are not convinced that underlying trends have shifted sufficiently to change our forecasts for mortgage market activity in 2009, but there are some positive signs for later in the year."

"Some large banks are making more funding available through enhanced lending commitments, which is helpful but will not satisfy consumer borrowing demand on its own.

He added: "We need further market measures to be introduced by the government around the Budget to encourage a mortgage market where all types of lenders - banks, building societies and specialist lenders, and large and small businesses - are encouraged, and enabled, to commit more funds to the mortgage market if we are to enhance lending activity significantly."