Gross mortgage lending increased six per cent last month, rising to an estimated £9.2billion, the latest figures from the Council of Mortgage Lenders shows.
This increase is unusual, the CML said, because February is the shortest month, but can partially be explained because of the end of the stamp duty holiday at the beginning of January, which distorted the figures for that month as homebuyers rushed to take advantage of the holiday in December before it ended.
February's figures show a six per cent decline on mortgage lending in February 2009, but the beginning of the year is broadly in line with the CML's 2010 forecast for total mortgage lending of £150billion.
Commenting on the figures, Paul Samter, economist for the CML, said: "As we look forward, we expect emerging signs of improvement as confidence in the economy grows and we move past the election. However, the need for the authorities to address fiscal deficit will inevitably slow the economy. At the same time the funding markets, while certainly better than a year ago, remain difficult and will limit the flow of available housing finance."
He continued: "Given the short-term weakness and distortions in the housing market, as well as more properties coming onto the market, it was perhaps unsurprising to see falls in some of the monthly house price indices in February. With activity unlikely to pick up much in the short term, we would expect to see continuing price fluctuation in the coming months."
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