The latest figures from the Bank of England show 47,584 loans approved for house purchase in June, up from 44,169 in May, and the highest level since April 2008, said the Council of Mortgage Lenders.
But this is still very low on any historic comparison and there were 36 per cent fewer house purchase approvals in the first half of 2009 than the same period of 2008.
The UK’s outstanding mortgage book is effectively stagnating at the moment with the adjusted net lending total of £343 million in June almost unchanged from May (£331 million), which was the lowest adjusted monthly figure on record, said the mortgage lender trade body.
CML economist Paul Samter said: ”Activity is certainly more positive than at the start of the year. This is consistent with the improvement in housing market sentiment, but the outlook is still sluggish, as capacity constraints on the lending industry and continuing deterioration in the labour market will act as a brake on the pick up.
“Overall, these numbers are consistent with our outlook for a gradual improvement from historic lows following the financial system turmoil last year, but for any recovery to be slow and drawn out.”
The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 98 per cent of all residential mortgage lending in the UK.
There are 11.1 million mortgages in the UK, with loans worth over £1.1 trillion, according to the CML.
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