The number of house purchase loans picked up in February, according to the Council of Mortgage Lenders (CML), increasing by + 4% to 24,300 house purchase loans worth £3.1bn.

Historically activity still remains very weak, running at around one-third of the average February total of 76,000 loans for house purchase between 2002 and 2007. First-time buyers are also still suffering thanks to banks’ constrained lending.

In addition, remortgaging declined steeply with 35,000 remortgage loans in February, down from 44,000 in January- a 20% decline. The CML expects demand for remortgaging to remain muted as lenders’ standard variable rates are attractive compared to new mortgage pricing, and house price falls continue to erode equity levels which will exclude some borrowers from the best remortgaging deals available to those with large deposits.

There was also a shift away from tracker products towards fixed rates, with 56% of new loans at fixed-rate, up from 49% in January, while 31% were tracker products, down from 38% in January.

An increased proportion of homebuyers are not paying stamp duty as a result of falling house prices and the temporary raising of the nil-rate threshold. In February, 57% of all house purchase loans did not incur stamp duty, compared with 48% a year earlier.

Michael Coogan, CML director general, said: “We are not convinced that underlying trends have shifted sufficiently to change our forecasts for mortgage market activity in 2009, but there are some positive signs for later in the year.

“Some large banks are making more funding available through enhanced lending commitments, which is helpful but will not satisfy consumer borrowing demand on its own. We need further market measures to be introduced by the government around the Budget to encourage a mortgage market where all types of lenders – banks, building societies and specialist lenders, and large and small businesses – are encouraged, and enabled, to commit more funds to the mortgage market if we are to enhance lending activity significantly.”