The figures marked a 15% rise in advances compared to February but a 19% drop on March 2012 which was attributed to distortions created by the end of the stamp duty holiday.
CML director general Paul Smee said: "More borrowers are taking out higher loan-to-value mortgages than any other time in the last four years , a sign that lenders are open for business, and that borrowers, even those without a large deposit, are increasingly able to get a foot on the property ladder."
Contributing to the rise in house purchase loans, lending to home movers increased by 11%, which represented 22,900 loans worth £3.8bn, in March compared to the previous month.
On a quarterly basis, a total of 65,300 loans were advanced to home movers, down from 86,000 in the fourth quarter of 2012 and 71,600 loans in the first quarter of last year.
Overall 116,200 loans were advanced for house purchases in the first quarter, worth £17.2bn, representing a 21% fall compared to the fourth quarter of 2012 and down by 5% compared to the first quarter of last year.
Remortgage lending
Remortgage lending increased by 15% in March but remains low compared to historical levels and was 14% lower than March last year.
In the first quarter overall, £9bn was advanced to borrowers remortgaging which was 10% down compared on the fourth quarter of 2012 and down by 19% compared to the first quarter last year.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Remortgage numbers are still subdued over the quarter perhaps surprisingly when there are so many excellent deals out there. It may be that borrowers are sat on attractive reversion rates or standard variable rates so they don't wish to remortgage, or perhaps they are trapped because of tighter criteria or lack of equity in their homes so can't switch.
“There may also be borrowers holding out for even better rates. However borrowers should look at rates in an historical context, these are the cheapest rates ever seen and even if they do edge a little lower snapping one up now might be a good move.”
Ashley Brown, director of the independent mortgage broker Moneysprite, blames tough economic conditions for the less than impressive lending figures.
He said: "With inflation stubbornly high and the house prices still sliding in several parts of the country some buyers are still finding reasons to sit on their hands.
“The housing market is making only tentative steps towards a return to normality and people's appetite for mortgages, even the good value mortgages available now, is still being stymied by patchy levels of confidence.”
But Andy Knee, chief executive of LMS, was optimistic that the growth seen in March for remortgages will gather momentum as the summer approaches.
He said: “There has been noticeable growth in the remortgage sector during the month of March with the first year-on-year increase of 4% in the number of remortgage approvals for 11 months.
“We anticipate seeing continued growth in the remortgage sector over the coming months fuelled by the current competitive mortgage rates and the ongoing momentum from the government’s Funding for Lending Scheme.”
