The number of mortgage approvals made by banks went up in February, industry figures have shown.

Loans for new house purchases rose by 16 per cent on the previous month to 28,179, according to the latest data from the British Bankers Association.

That figure is significantly higher than the six-month average of 22,068. Banks approved mortgages totalling £7.8billion in February, a marginal rise on January’s figure of £7.6billion.

However, the £7.8billion lending figure was still less than half the equivalent for the same month last year, down 56.5 per cent.

In addition, the amount of money actually issued by banks on mortgages, which lags the approval of mortgages by around a month, was higher than the mortgage approval figure, at £9.2billion, meaning the overall trend is still for a decreasing amount of lending.

The £9.2billion gross mortgage lending figure was at its lowest level since June 2001.

Markets reacted positively to the data. Charlie Campbell, analyst for Liberum Capital, said: "This is not the bottom of the housing market, but at least it’s the end of the period of freefall, and might mean volumes increase this year even as prices continue to weaken."

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said the data showed that the increase in buyer enquiries – highlighted in the KM Group’s recent On The Move campaign – was now feeding through into actual transactions.