Thursday, August 19, 1999 Published at 12:31 GMT 13:31 UK
Business: The Economy
No let-up in housing boom
The housing market is staying on the up
The housing boom shows no sign of letting up, with mortage lending figures for July showing a further big increase.
UK mortgage lending in July was £11.5bn - up £500m from the previous month.
June's total was itself the highest for six years, and the continuing strength of the property market is likely to put further pressure on the Bank of England to increase interest rates.
The Council of Mortgage Lenders (CML) figures for July were the highest the organisation had recorded since it began compiling records in 1993.
But the CML continued to dismiss suggestions that the current housing market was mirroring the boom of the late 1980s, which ended in a house-price crash.
Michael Coogan, director general of the CML, said buyers, particularly those entering the market for the first time, were spending on average 13% of their income on housing costs.
In the 1980s boom, he said, the figure for first-time buyers was about 30% - making them extremely vulnerable to interest rate increases.
Mr Coogan said house-buyers and lenders were not taking any great risks in a bid to cash-in on the rising housing market.
"Contrary to some recent misleading publicity, average new mortgages continue to be based on conservative lending criteria," he said.
"Our figures suggest no evidence of riskier behaviour by either borrowers or lenders."
The CML figures showed that first-time buyers paid an average of £58,227 for a property.
The average price paid by those moving up the property ladder was £71,940.
The boom in the housing market does not appear to be spreading evenly across the UK.
Adrian Coles, the director general of the Building Societies Association, said the market was divided into areas enjoying a "mini-boom" and others suffering from a weak market.
He said: "While this means there is no need to worry about overheating in the market as a whole, buyers in local hot-spots may want to exercise some caution."
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