Mortgage lending rose by 16 per cent during March in a further sign that activity in the housing market is beginning to pick up.
A total of £11.5 billion was advanced during the month, up from £9.9 billion in February, according to the Council of Mortgage Lenders.
But the group warned that although the market was showing signs of stabilising, transactions remained at a low level, with lending 52 per cent lower than in March 2008.
The figures came as HM Revenue & Customs published data showing that the number of homes changing hands soared by 40 per cent during March.
Around 60,000 homes in the UK were sold for more than £40,000 during the month, up from 43,000 in February.
The latest positive data on the housing market comes after the Bank of England reported a 19pc jump in the number of mortgages approved for house purchase during February, while property website Rightmove has said asking prices have risen for the past three months.
CML director general Michael Coogan said: “While the market is beginning to show some signs of stabilising, housing transactions and lending are set to remain low for the foreseeable future.”
The group added that despite the rise in lending during March, total mortgage advances for the first quarter of the year totalled just £33 billion – a 29 per cent drop compared with lending during the fourth quarter of 2008.