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News: Mortgage lending reaches new high

Gross mortgage lending in March reached £28.3 billion - an increase of 26% on the previous month, according to the latest data from the Council of Mortgage Lenders (CML).

This is the highest March lending figure on record and is 34% higher than the £21.2 billion lent in March 2005.

Lending usually starts to pick up in March from the lull in house buying activity during the winter months. But lending has been unseasonally strong throughout the winter, producing five consecutive monthly record lending figures.

The strong increase in mortgage lending between February and March is much greater seasonal factors alone would produce, suggesting that in seasonally adjusted terms March lending is likely to be a record high, substantially above the previous record in December.

Commenting on today's figures, CML Director General Michael Coogan said: "The record lending in March reflects the high level of loan approvals in the autumn and winter as house prices stabilised and consumer confidence returned to the market. House-buying activity was particularly strong around London reflecting high city bonuses, and this is probably a factor behind the strength of lending."

"Mortgage approvals remain high, but the upward trend in seasonally adjusted approvals for house purchase witnessed over the past year seems to be drawing to an end. This suggests underlying activity is peaking and is in line with our forecasts. However, we expect remortgaging to remain strong and support a robust level of lending throughout the spring and summer."

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