The CML revealed this was up 17% by number and 14% by value on March 2010, compared to similar year-on-year falls for house purchase loans despite a leap of 24% on February.
In the first quarter of 2011, remortgaging accounted for 37% of all lending, up from 30% in Q4 2010.
House purchase loans increased 24% in March to 37,800, compared to February, with value increasing 26% to £5.4bn. While the CML noted this was a significant increase on the beginning of the year, house purchase loans were down 17% in number and 16% in value on the same period of last year.
Over the course of Q1, house purchase lending fell 26% by volume and 27% by value on Q4 2010.
Meanwhile, remortgage lending in Q1 increased 14% by volume and 11% by value on the last quarter of 2010, as borrowers expected to see a rise in interest rates. The CML said remortgaging will likely strengthen further over the next few months on the back of borrower sentiment swinging in its favour.
Michael Coogan, director general of the CML, said: “We saw a significant increase in both house purchase and remortgage lending in March but, over the first quarter of the year as a whole, the picture was subdued and that is unlikely to change for the foreseeable future.
“Looking ahead to lending figures in the coming months, the Easter, royal wedding and May bank holidays will impact on the level of activity, timing and spread of completions in the second quarter meaning that any one month’s data should not be interpreted as a reflection of a trend.
“It may take until publication of the second quarter’s activity to get a full understanding of how the market has reacted to the squeeze on household incomes.”
Loans for first-time buyers increased 28% in March to 14,600 and 31% in value to £1.7bn, with home mover loans rising to 23,200, worth £3.7bn, up 22% by volume and 23% by value on February.
However, both first-time buyers and home mover loans fell 17% by number and 16% by value year-on-year, while on a quarterly basis first-time buyer and home mover numbers 23% and 28% respectively.
Lending criteria remained relatively unchanged over the quarter. First-time buyers borrowed an average LTV of 79% in March and Q1, with home movers borrowing an average LTV of 68% for March and Q1.
In addition, the move away from interest-only mortgages continued, particularly for first-time buyers.
Prior to the financial crisis, around 30% of loans to first-time buyers were interest only. In March 2011, only 4% of first-time buyers took out an interest-only mortgage.
