Mortgage lending reached a record high during June on the back of the housing market revival, figures showed yesterday.
A total of £32.2 billion was advanced during the month, beating the previous record of £29.1 billion set in May, according to the Council of Mortgage Lenders.
The group said lending usually strengthened in June, reflecting the pick-up in house buying during the spring months, adding that the 11 per cent month-onmonth rise was broadly in line with previous June increases.
But it added that the level of approvals suggested demand both from people buying a property and those r emortgaging remained strong, and robust lending looked set to continue during the summer months.
CML director general Michael Coogan said: "Record levels of lending have been achieved in nine of the past 12 months.
"The figure reflects the seasonal rise in house buying, strong house price growth and high levels of remortgaging activity."
But he added that with inflation above the Bank of England's target, there was a real risk that interest rates could rise, and this may moderate lending towards the end of the year.
The British Bankers' Association also reported strong lending by the major banks during June.
It said net lending, which strips out redemptions and repayments, reached £5.6 billion during the month, down slightly on May's figure of £5.82 billion, but up on the recent monthly average of £5.3 billion.
It added that mortgage lending during the first half of the year had been 18 per cent stronger than during the same period of 2005.
The figures will further ignite the debate as to whether the mini-boom in the housing market is continuing.
Mortgage lending remains strong, while property web-site Rightmove said house prices in England and Wales soared by 2.9 per cent during the four weeks to July 8, their strongest rise for nearly five years.
The Royal Institution of Chartered Surveyors also said house prices in London rose at their fastest rate for six-and-a-half years during June, while in the South-east price rises reached a four-year high, and demand across the country remains at record levels.
But figures from mortgage lenders Halifax and Nationwide showed the property market slowing down.
Nationwide has reported three months of subdued growth, with prices rising by just 0.1 per cent in April, 0.2 per cent in May and 0.3 per cent in June, while Halifax said prices edged ahead by just 0.1 per cent during May, and fell by 1.2 per cent in June.
Howard Archer, chief UK and European economist at Global Insight, said: "Very strong mortgage lending and approvals in June indicate that housing market activity is currently robust.
"This suggests that house prices may well spike higher in the near term at least, after showing some recent signs of losing momentum."
But he added that he still expected growth to eventually settle down into an extended period of relatively modest rises.
Philip Shaw, an economist at Investec, said: "The figures suggest that mortgage lend-ing remains buoyant, but I don't think there is a boom in the UK housing market."
But while mortgage lending remained strong during June, consumers continued to shun other forms of credit.
The BBA said unsecured lending, such as credit cards, loans and overdrafts, fell by £56 million during the month as people repaid more than they borrowed.
Within this figure lending through loans and overdrafts rose by just £189 million, well down on May's increase of £669 million, while credit card lending dropped by £245 million, following a £262 million fall the previous month.
Credit card borrowing has now fallen during four of the past six months.
David Dooks, BBA director of statistics, said: "Net unsecured lending in 2006, so far, has risen by less than half the increase seen in the same period of last year. Borrowing on credit cards remains particularly subdued."
