Number of mortgage loans up 12% after weak January

The number of mortgage loans from lenders jumped 12% in February as demand recovered from an "extremely weak" January, figures showed today.

The Council of Mortgage Lenders (CML) said 35,000 home loans were advanced over the month, after one-off factors such as the winter weather and the end of the stamp duty holiday in December hit lending in January.

The total number of loans was up 49% on a year earlier while the value of mortgages was £5 billion - 9% up on January and 67% ahead of 12 months earlier.

While the CML said the figures signified a "modest recovery" in lending, it added that the weather and the end of the stamp duty holiday - which had lifted the tax threshold to £175,000 for a year - meant that trends were difficult to identify.

But the Government gave a boost for first-time buyers in March's Budget with a duty exemption on purchases up to £250,000 - financed by a hike from 4% to 5% on properties above £1 million.

CML head of research Bob Pannell said: "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."

Andrew Montlake, from independent mortgage brokers Coreco, added: "At the moment, it's difficult to predict how the housing market is going to react from one month to the next, because there are so many factors influencing market conditions.

"Once the General Election and World Cup are out the way, the picture will be much clearer."