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Mortgage lending Springing forward

Mortgage lending rocketed in March, reflecting the traditional spring boost to the property market, according to figures from the Council of Mortgage Lenders.

The monthly CML survey of banks and building societies shows gross lending up by 22 per cent to £11.3bn in March from £9.3bn in February. This is similar to last year&#39s figures of £10.8bn in March up from £7.9bn in February. House purchase loans rose to £7.2bn in March from £5.3bn, accounting for 64 per cent of all new lending.

Remortgaging showed the first signs of declining popularity, although levels remained strong at £3.3bn in March from £3.4bn in February.

Average new mortgage rates fell to 5.82 per cent from February&#39s figure of 5.86 per cent – previously the lowest rate since December 1999, reflecting fierce competition

in the mortgage market.

Average new variable rates fell to 5.72 per cent from 5.96 per cent while the average new fixed rate in March was 6.02 per cent compared with 6.36 per cent in February.

First-time buyers borr-owed an average of £61,497 in March, up from £59,942 in February, representing 80 per cent of the value of the property and 2.37 times income.

Monthly figures from the Building Societies Association support these figures, with gross advances up to £2.5bn in March from £1.9bn in February, and net advances at £821m, up from £685m.

CML director general Michael Coogan says: “Mortgage rates are now at their lowest since the end of 1999 and, with April&#39s interest rate cut still to feed through the mortgage market, is set to yield further benefits for customers during the summer.”

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