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Mortgage lending up slightly in February but still 'weak'

The Council of Mortgage Lenders (CML) has reported a 4% rise in the number of mortgages lent in February 2009.

There were a total of 24,300 home loans taken out over the month, up from 23,400 in January 2009. However, the overall value of these loans remained almost the same as January, at £3.1 billion.

The number of first time buyers taking out mortgages also increased modestly in February, to 9,400, up 7% from January. However, average deposits were 25%, more than double the average deposit for a first time buyer in the same month a year before.

Despite the slight gain in numbers taking out mortgages, the CML says that activity remains ‘very weak’ and that the 24,300 loans compares to the 76,000 loan average recorded in the years between 2002 and 2007. The number is also down a huge 47% from the number recorded in February 2008.

The CML is now calling upon the Chancellor to include more measures in the budget to help lenders commit more funds to mortgages, adding that the number of remortgages in February fell by 20% from January to 35,000.

Industry experts claim that tight lending criteria remain a major obstacle for the industry.