Mortgage lending has soared this Spring - by 21% during March - as both buyers and people remortgaging returned to the market.

A total of £11.3 billion was advanced during the month, the highest level since November, but still slightly down on the £11.5 billion that was lent in March last year, the Council of Mortgage Lenders (CML) said this week.

The group attributed the increase to a rise in activity in the housing market, as well as strong demand from existing homeowners who were remortgaging to a new deal.

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It said loan approvals for remortgaging were at their highest level for more than two years during February, and this fed 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.

Commenting on current market conditions, CML Chief Economist Bob Pannell said: "The housing market has emerged hesitantly from hibernation.

"Household finances are under a lot of pressure, and as a result demand for house purchase loans fell in the first three months of 2011.

"Lenders expect mortgage credit availability to improve this quarter, and this should help to underpin house purchase activity albeit at pretty low levels," he said, noting that remortgage demand "continues to firm" linked to expectations of higher base rates.

(BMcC/GK)