June mortgage lending breaks records

June mortgage lending broke all previous records reaching £32.2 billion, new figures from the Council of Mortgage Lenders (CML) have revealed.

The previous monthly record, of £29.1 billion, was set in May. The figure is up from £25.7 billion during June 2005.

June is traditionally one of the most active months of the year for mortgage activity, with the 11 per cent increase around historical levels for the month.

"Record levels of lending have been achieved in nine of the past twelve months," said director general of the CML Michael Coogan.

"Today's figure reflects the seasonal rise in house buying, strong house price growth and high levels of remortgaging activity.

"The level of mortgage approvals shows that demand for houses and remortgages remains strong, so we expect to see continued robust lending during the summer."

The CML has warned that rapidly rising fuel prices and unexpectedly high house price growth could cause inflationary pressures however, leading to an interest rate rise.

A rise in the base rate of borrowing would deter first time buyers and cool the market towards the end of the year, it added.

"With inflation above the Bank of England's target, the risk of an interest rate rise seems more real than earlier in the year," said Mr Coogan.

"This may moderate lending and demand towards the end of the year.

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