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Mortgage lending edges up in February but lack of funding hampers recovery

MORTGAGE lending saw a small boost last month with a six per cent rise compared to January, but remains six per cent lower year-on-year.

Despite the month-on-month increase, the estimated £9.2bn in mortgage lending for February was the lowest for a decade, and economists warned the lending market remained in flux.

Economist Paul Samter from The Council of Mortgage Lenders (CML), which published the data, said funding remained “difficult”.

“The funding markets, while certainly better than a year ago, remain difficult and will likely limit the flow of available housing finance. With activity unlikely to pick up much in the short term, we would expect to see further modest volatility in the coming months,” he said.

The CML said that the start of the year was broadly in line with its forecast of £150bn of mortgage lending in 2010.

February’s figures follow a slowdown in January when housing market activity was hampered by the cold weather and the end of stamp duty relief.