House purchase lending increased by 45% year on year in March, making it the ninth consecutive month of year-on-year growth, according to figures released today by the Council of Mortgage Lenders (CML).

Remortgaging, however, was 29% down year on year, the 23rd consecutive annual fall. This shows the continuing trend of recovering house purchase activity but a moribund remortgage market.

The 45,000 loans for house purchase in March (worth £6.3 billion), were up 25% in volume (24% in value) from February and the 28,000 loans for remortgage (worth £3.5 billion) were up 23% in volume (21% in value).

For the first quarter as a whole, there were 112,000 loans for house purchase (worth £16.1 billion), down from 171,000 (worth £23.3 billion) in the last quarter of 2009 and 74,000 remortgage loans (worth £9.3 billion) down from 89,000 (worth £11.1 billion) in the last three months of 2009. No trend can be inferred from this though, given the distortion caused by the end of the stamp duty holiday in December.

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First-time buyer activity is now rebounding faster than home-mover activity with 17,300 loans to first-time buyers (worth £2 billion) in March, up 27% on February and 42% on March 2009. The 27,500 home-mover loans (worth £4.3 billion) was a 24% rise in volume (23% in value) on February and a 49% rise in volume (65% in value) on March last year.

Michael Coogan, Director General of the CML, said: "Today's figures indicate there is currently some momentum to house purchase lending, but for the sake of the future health of the housing and mortgage markets, the new government will need to focus on the critical issue of funding and how to address the issues arising from the repayment of the emergency support provided during the financial crisis. The UK is at risk of a chronic under-supply of credit – and the rationing of mortgages for customers – for years to come."

(CD/GK)