The level of house purchases rose by 45% year-on-year in March, marking the ninth month in a row of annual growth.
Data from the Council of Mortgage Lenders shows that there were 45,000 loans for house purchase in March, worth £6.3bn and up 25% in volume compared to February.
But the remortgage market was down 29% year-on-year, the 23rd month where there was a consecutive annual fall.
There were 28,000 remortgage loans worth £3.5bn were up 23% in volume.
Between January and February there were 112,000 house purchase loans worth £16.1bn, down from 171,000 in the last three months of 2009.
Some 74,000 remortgage loans were advanced in Q1 worth £9.3bn, compared to 89,000 in Q4.
The CML says that the declines do not represent a trend as the market was distorted by the end of the Stamp Duty holiday in December.
First-time buyer activity is now recovering faster than home-mover activity with 17,300 loans to first-time buyers in March, up 27% on February and 42% on March 2009.
There were 27,500 home-mover loans accounted for a 24% rise in volume on February and a 49% rise compared to March last year.
In first-time buyers had an average deposit of 24% for the second month running.
This is the first time average deposits for first-time buyers have been lower than 25% for more than one month since January 2009.
Home movers in March needed less than 10% of gross income to cover their mortgage interest payments, while first-time buyers needed 13.3% of their income to cover their interest payments, the lowest since 2004.
Some 46% of new loans were fixed-rate deals in March, broadly unchanged for the first three months of 2010, but down from 60% in the last quarter of 2009 and
a peak of 80% last July.
Tracker rates accounted for 37% of new mortgage lending, again broadly unchanged, but up from last July’s low of 12%.
Michael Coogan, director general of the CML, says: “Today’s figures indicate there is currently some momentum to house purchase lending, but for the sake of
the future health of the housing and mortgage markets, the new government will need to focus on the critical issue of funding and how to address the issues arising from the repayment of the emergency support provided during the financial crisis.
“The UK is at risk of a chronic under-supply of credit – and the rationing of mortgages for customers – for years to come.”