Gross mortgage lending springs back in March

MORTGAGE lending bounced back in March from the previous month but is still two per cent lower than a year ago, data from the Council of Mortgage Lenders (CML) showed yesterday.

Evidence of a seasonal recovery for the UK’s housing sector is emerging, as gross mortgage lending rose 21 per cent from £9.3bn in February to £11.3bn last month.

Yet analysts say the outlook remains sluggish, with lending down £200m compared to March 2010 and sales still hampered by a squeeze on funding for first-time buyers.

“Let’s not be fooled into thinking the market is blossoming,” said Peter Rollings, chief executive of estate agent Marsh and Parsons.

“In London there’s no shortage of demand from would-be buyers, but unless more assistance from lenders comes their way, the first rung on the property ladder will remain far from reach for thousands,” he added.

Remortgage approvals in February were the highest for more than two years, with the CML citing expectations of imminent interest rate hikes.

Yet inflation expectations dropped sharply to 2.9 per cent in April from 3.5 per cent in March, a Citigroup and YouGov survey showed yesterday.