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Mortgage lending hits £16bn high as price spiral continues

Mortgage lending reached a record level of £16.6bn, in March, up from £13.3bn the previous month, according to the latest figures from the Council of Mortgage Lenders.

Building Society Association gross advances were also buoyant, rising by 28 per cent to £2.7bn last month from £2.1bn in February.

Net advances by mutuals increased to £682m in March from £568m in the previous month.

The CML says the strong rise in loans for house purchase ensured that lending was considerably higher than the £12.3bn recorded in March 2001.

Total loans for house purchase increased to £98.3bn in March, or 56 per cent of gross advances, compared with £6.8bn in February, accounting for 51 per cent of all gross advances.

The number of loans reached a total of 116,000 in March, compared with a figure of 87,000 in February and 103,000 in March 2001.

BSA figures show that approvals by its members increased to £3.4bn in March compared with £2.8m in February.

In the savings market, building societies&#39 had net inflows of £731m in March, up from £464m in February.

After stamp duty was unchanged in the Budget, the CML is now calling for the Government to red-uce the impact of stamp duty on first-time buyers by raising the threshold.

CML chairman Andrew Pople says: “We are disappointed that the Chancellor has not addressed our concerns about the impact of stamp duty on first-time buyers.

“As we reported recently, with the average price for a house now around the £100,000 mark and £78,000 for first-time buyers, 60 per cent of first-time buyers now pay stamp duty, compared with just 23 per cent in 1997.”

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