Mortgage lending reached another record in July as the number of people borrowing money to buy a home picked up, figures showed yesterday.

A total of £25 billion was advanced during the month, 12 per cent more than during June, which was also a new high, according to the Council of Mortgage Lenders (CML).

There were also signs first-time buyers were returning to the market, with their numbers increasing to almost 35,000 from 30,000 the previous month.

Lending for house purchase was £11.6 billion, 20 per cent higher than in June and the highest figure since August last year.

Remortgaging remained strong during July at £10.7 billion, which was the second highest monthly figure ever.

Michael Coogan, CML director general, said: "July's figures support the picture of a housing market that remains stronger than expected.

"The apparent increase in first-time buyers in July is welcome, as their numbers have been seriously depleted in recent months."

But the CML warned buyers were borrowing much more against their income than they were a year ago and, while this was offset by low interest rates, the cost of borrowing was expected to rise next year.

Mr Coogan said the group did not anticipate any shocks to the market that would cause a serious problem.

Thursday August 21, 2003