The number of mortgage approvals made to home-buyers rose to its highest level in six months in February, the Bank of England said today.

The total of 61,760 suggests housing market activity is recovering after experiencing a lull during the latter part of 2014, although it is still down a fifth on the recent peak of 75,557 approvals seen at the start of last year.

A mortgage price war has intensified this year, with many lenders offering their best rates yet on certain deals due to the prospect of the Bank of England's base rate remaining at a record low of 0.5% this year.

The number of loans made for house purchase has now increased for three months running and is the highest level since 63,856 loans in August.

Matthew Pointon, property economist at Capital Economics, said the recovery should continue as lenders become more comfortable with a new regulatory regime, which has seen the introduction of stricter mortgage rules.

He said: " As greater confidence in the economy encourages more households to move, that should help activity levels and mortgage lending to rise further over the coming months."

Consumer credit, which is made up of people's borrowing on credit cards, loans and overdrafts, increased by £740 million in February, which is below the a verage monthly increase of £900 million in the previous six months.

Lending to non-financial businesses has been much improved at the start of the year, with an increase of £440 million adding to the rise of £1.79 billion in January.

Within February's figure, net lending to small and medium-sized enterprises jumped by £566 million, compared with the average monthly decrease of £300 million in the previous six months.

Howard Archer, chief UK economist at IHS Global Insight, said: "The increase in bank lending to small companies is particularly encouraging given past concerns that lack of access to capital - at a reasonable price - could hold back their operations and investments."