Gross mortgage lending increased in January, spelling good news for the UK''s housing and mortgage markets.

The Council of Mortgage Lenders (CML) has revealed that lending increased by 11 per cent between December and January.

Total lending was recorded as £26.5 billion last month, up on December''s £23.9 billion and the only just below the £26.6 billion recorded in January 2007.

The CML has welcomed the figures but is adamant that the government can do more to help rejuvenate the UK mortgage market.

"Gross lending held up well in January," commented CML director general Michael Coogan.

"Homebuyers might be more inclined to transact if their moving costs were reduced and the government has the opportunity to address this by raising stamp duty thresholds and cutting the rates of stamp duty in next month''s Budget," he added.

Alistair Darling will deliver his Budget on March 12th - his first since becoming chancellor on June 28th 2007.