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Big rise in March mortgage lending

The housing market appears to have sparked into life with figures revealing a 21 per cent surge in mortgage lending in March.

The Council of Mortgage Lenders (CML) said the upturn was down to a rise in housing market activity and increased demand from homeowners for remortgaging.

Mortgage lenders advanced a total of £11.3 billion during the month - the highest level since November, although the figure is slightly down on the £11.5 billion lent in March 2010.

The CML revealed that the rate of loan approvals for remortgaging in February had reached a two-year high, feeding into higher lending levels in March.

Demand is expected to remain strong as the prospect of interest rate hikes prompts people to remortgage off their lenders' standard variable rates.

CML chief economist Bob Pannell said: "The housing market has emerged hesitantly from hibernation. Lenders expect mortgage credit availability to improve this quarter, and this should help to underpin house purchase activity, albeit at pretty low levels.

"Remortgage demand, meanwhile, continues to firm, presumably linked to expectations of higher base rates. Stronger remortgage activity looks set to continue propping up overall lending."

Copyright © Press Association 2011

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