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Lending reaches record level as rates edge down

Mortgage lending suffered a seasonal decline around Christmas, according to figures from the Council of Mortgage Lenders and Department of Environment Transport & Regions.

Gross mortgage lending by banks and building societies fell to £10bn in December from £10.9bn in November, with remortgaging down to £3bn from £3.2bn in the same period.

However, overall lending throughout the year shot up to a record £119.3bn in gross advances compared with £114.3bn in 1999.

Average interest rates on new mortgages continued on a downward trend from 6.15 per cent in November to 6.08 per cent in December, the lowest level since last January when they stood at 6 per cent.

Average variable rates dropped to 6 per cent in December from 6.07 per cent in November, with average fixed rates down to 6.25 from 6.31 per cent in the same period.

CML director general Michael Coogan says: “Affordability remains good, with both first-time buyers and movers continuing on average to borrow at conservative levels in relation to income and the price of their home. This is expected to continue in 2001.”

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