Total gross mortgage lending is fell to £10.5 billion in February, according to latest estimates from the Council of Mortgage Lenders (CML).

This is 8% lower than January’s gross lending figure of £11.4 billion but a 1% increase from £10.4 billion in February 2012.

CML chief economist Bob Pannell said: “There continue to be signs of improvement in activity and sentiment in the housing and mortgage market sector, despite headwinds from a challenging economic backdrop.

“With relatively strong house purchase numbers and subdued remortgage activity, the underlying position does not appear to have changed much over recent months.

“Further policy intervention in the housing market is expected in today’s Budget and if so, it is important that any policy objectives are clearly articulated.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the figures were disappointing.

“However, on the ground, the picture has been more positive than the official figures suggest,” he added.

“January and February have both been incredibly busy months for mortgage brokers, with no sign yet of a let up. Estate agents also report a busy start to the year, although stock levels still remain low. There are signs that Funding for Lending is working, with lower mortgage rates across the loan-to-value bands, giving us some of the cheapest mortgages ever seen. This is increasingly important because of the other issues in the economy and will be essential if housing purchase activity is to be robust this year.

‘The outlook is still broadly positive, despite the persistence of wider economic pressures. The weakness of the pound and problems in Cyprus illustrate just how fragile the situation is.”