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Purchase lending hits record

There was a record level of house purchase lending in August, according to the Council of Mortgage Lenders&#39 latest figures.

The CML results show a swing towards house purchase away from remortgaging. Lending for house purchase reached £11.5bn in August, the highest figure CML has ever recorded, accounting for 48 per cent of total lending. This was an increase from£11bn in July and £10.8bn in August last year.

Remortgaging was still strong at £9.4bn, 40 per cent of total lending, but shows a decrease from the £10.5bn figure for July.

GMAC Residential Fun-ding says it has seen a large increase in mortgage completions in August compared with the same period last year, with the most significant growth in the buy-to-let sector.

CML director general Michael Coogan forecasts a slowdown in house price growth and warns people borrowing now to factor in an expectation of higher interest rates next year.

GMAC RF head of marketing services Jeff Knight says: “Our figures back up the strong growth seen by the CML and show that the market as a whole continues to be buoyant.

“The fact that our buy-to-let completions are so high supports the CML&#39s theory that the market is still difficult for first-time buyers, which is maintaining a healthy demand for rental properties.”

Coogan says: “The latest figures continue to tell a story of a housing and mortgage market that is buoyant, but difficult for first-time buyers to enter. But the swing back in house purchase lending supports the view of a resurgence in confidence following the end of the war in Iraq, further amplified by the unexpected interest rate cut in July.”

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