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Fewer take fixes as lending leaps

The property market continues to boom with net lending increasing by 37 per cent in the last year, according to figures from the Building Societies&#39 Association Net advances by societies were £1.33bn in March, a big rise from £958m in March 2003. Building society gross advances totalled £4.1bn in March, up from £3.4bn in March last year.

Figures from the CML show the highest level of lending for four months, with lending up by 19.5 per cent in March. Gross advances leapt by 25 per cent to £24.5bn in March from £19.6bn in March last year.

The CML figures show a slight improvement in the first-time buyer market. FTBs accounted for around 31 per cent of new loans for house purchase in March, down from 34 per cent in March 2003 but there was an increase in the number of FTBs to 34,000 from 30,000.

Nearly three-quarters of lending is still being taken out at variable rates, with only a quarter at fixed rates.

CML director general Michael Coogan says: “Given the plethora of hints and warnings about the likelihood of rates to concern, it is perhaps surprising that more borrowers are not latching on to fixed-rate deals now. It seems that the interest rate rises so far have had little impact on consumer behaviour.”

Independent mortgage expert Richard Hurst says: “The level of individual debt is obviously causing concern but the cost of buying money to get a loan is still phenomenally low compared with a few years ago.”

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