18 August 2006, 13:25  UK July mortgage lending highest ever for the month

Mortgage lending in the UK remained strong in July, indicating a robust property market but the impact of the Bank of England's surprise rate hike in August may dampen demand in the coming months, the Council of Mortgage Lending said. Gross mortgage lending reached 30.4 bln stg in July -- the highest ever for the month and the second highest on record. The all time high was set in June, at 32.4 bln stg. "Another month, another record lending figure. Seasonal factors are continuing to support housing transactions and buoy house price growth. Bank of England approvals data shows that there is a strong appetite among borrowers for remortgages and other types of loan," said CML Director General, Michael Coogan. "But the timing of the Monetary Policy Committee's interest rate rise a fortnight ago caught some people by surprise, and its effect is not reflected in today's figures. So, 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," he added.

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