The number of mortgages provided to consumers in March was up 29 percent on the previous month, lenders report.
March saw a large increase in the number of loans being provided for home purchase - but the figure was still far lower than the same month last year, new figures from the Council of Mortgage Lenders (CML) have revealed.
There were 31,000 mortgages awarded in March, up 29 percent from February but down 33 percent from March 2008. The total value of the loans was £4 billion, 29 percent more than in February but down 43 percent on March last year.
Bob Pannell, head of research at the CML, said that "there is a sharp dividing line" in the mortgage market between people who have enough capital to raise a deposit and those who do not. He blamed this on lending conditions, which are "still constrained".
He claimed that people who are able to afford a deposit are currently in a good position, with debt payments at low levels and mortgage interest payments smaller than in recent years. However, he warned: "Even so, a mortgage is a long term commitment. People borrowing now should be mindful of the years ahead when interest rates eventually rise, as they will."
For people unable to raise a deposit, the property market "is still both difficult and uncertain", Mr Pannell claimed. "While there are some signs of demand increasing, house prices remain weak and lending criteria inevitably remain inherently conservative as lenders necessarily seek to rebuild their capital position."
