Record lending but a slowdown may happen soon

Lending - including remortgaging - rose by �29.2bn in July, up from �28.2bn the previous month and fuelled by a record �14.7bn in loans for house purchases.

However, figures from the British Bankers' Association (BBA) found banks' mortgage lending slowed in July.

Lending rose by �5.7bn, lower than the �6.4bn for June but in line with the recent monthly average of �5.8bn.

The CML figures are considered to be more complete than the BBA's.

Estate agents are continuing to report a slowdown in current activity in their offices but this will not be reflected in lending figures for a few months Michael Coogan, CML director general House prices 'drop 2% in weeks'

While the BBA's survey applies solely to the banking sector, the CML includes data from all its UK members, including both banks and building societies.

The slowdown in lending by BBA members could therefore be explained by banks losing mortgage market share in the short term.

Appetite waning

There were 131,000 loans for house purchases in July, the highest total since August 2002, the CML said.

However, the appetite amongst homeowners for remortgaging seems to be abating.

In total, remortgaging accounted for 39% of all loan advances in July compared with 44% in June, the CML said.

Michael Coogan, CML director general, said that the lending figures indicated "a strong seasonal revival in the house purchase market this spring".

However, he suggested that the full effects of two consecutive Bank of England interest rate rises had not yet impacted their lending figures, as the data records loans made at the completion of a house purchase.

"Estate agents are continuing to report a slowdown in current activity in their offices, but this will not be reflected in lending figures for a few months," Mr Coogan said.

Price falls

Mr Coogan's argument is supported by the latest house price survey from property website Rightmove.

The survey showed asking prices fell 2% in the five weeks to August 14.

Over the same period, the yearly house price inflation rate fell for the first time in seven months.