Mortgage approvals up 4%

The number of mortgages approved by lenders in February was 4% higher than the previous month at 24,300, according to the Council of Mortgage Lenders.

However the total value of all the loans approved - £3.1bn - was exactly the same as in January, and the number of loans approved was still only at just over half the level of February the previous year.

The CML said that despite the small rise, activity level remained very weak, with the 24,300 figure less than one third the historical average of 76,000 between 2002 and 2007.

February saw 9,400 loans for first-time buyers, an increase of 7% on January but a 46% fall since February 2008.

The CML said that for those able to get home loans, housing was now more affordable than at any time since 2004, with mortgage interest payments now consuming an average of 15.4% of a first-time buyer's income. This is down from a peak of 20.1% in February 2008.

Michael Coogan, CML director general, said that despite the growth, he was not convinced that underlying trends had shifted sufficiently to change the CML's forecasts for mortgage market activity in 2009, despite positive signs for later in the year. “We need further market measures to be introduced by the government 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."