Total lending increased in June by 16 per cent according to the Council of Mortgage Lenders, the fifth consecutive monthly increase.
June lending was still 9 per cent lower than the same month last year, down from 22.3bn from 28.2bn.
Lending for house purchase increased by 20 per cent to 11.9 billion in June, up from 9.9 billion in May. The comparable figure for June 2004 was 13.9 billion.
The number of loans going to first-time buyers declined to 27 per cent from 31 per cent in May. The number of loans going to movers increased from 69 per cent in May to 73 per cent in June.
Remortgaging increased from 9.3 billion in May to 10.4 billion in June.
The average pricing of fixed-rate products remained stagnant in June at 5.37 per cent. Fixed-rates accounted for 47 per cent of all loans, which is the highest take-up since July 2003.
CML Director General Michael Coogan says: “The latest lending figures show that the market is stable. Lending for house purchase is on the increase which indicates improved buyer confidence matched by sellers’ realistic price expectations. Most commentators agree that interest rates have reached their peak, and many expect rates to fall in the coming months. We agree. This will provide a modest boost for affordability and help to underpin market prospects and the attractiveness of home-ownership over the coming months.”