Mortgage lending remains strong

Demand for mortgages among house buyers is still strong

Mortgage lending is still running at record levels, according to the Council for Mortgage Lenders (CML).

Last month, gross lending stood at £30bn, which was the highest July figure yet recorded.

Although this was 6% lower than June's lending, it was still 19% higher than in July last year.

The figures show that the property market is still buoyant, although the CML says that it may cool off if interest rates rise further.

Michael Coogan, director general of the CML, said seasonal factors were supporting demand from house buyers.

"Bank of England approvals data shows that there is a strong appetite among borrowers for remortgages and other types of loan," he said.

"With financial markets suggesting the possibility of at least one more rate rise before the end of the year, we expect to see more subdued lending over the coming months."

Bank lending

The continued growth in demand for mortgages was underlined by separate figures from the British bankers Association (BBA).

In July, new net mortgage lending - which reflects the effect of repayments - rose by £5.7 billion.

That was slightly more than in June and above the average for the previous six months.

The BBA's David Dooks said: "The robust nature of mortgage lending continues, with recent monthly increases not far short of the movements seen when lending peaked in 2003/04."

However, the declining popularity of credit cards was shown by a further fall in the amount of new borrowing on plastic.

This dropped by £319m in July, after a fall of £268m in June.