Mortgage borrowing hits fresh all-time high

Mortgage lending hit another all time high in July in the wake of the Bank of England decision to cut interest rates to a 48 year low of 3.5 per cent, according to figures published yesterday.

Britons borrowed an increase of £8.35bn against their homes, up from £7.78bn in June and the highest increase since records began in April 1993. Indications in recent months that the country's housing boom may be slowing were not confirmed when Nationwide last week raised its forecast for house price growth for the year as a whole from 10 per cent to 13 per cent.

BoE figures showed that 111,000 new mortgages were taken out in July, the highest figure since November 2002. The data did not show what percentage of mortgage lending was accounted for by remortgaging, as opposed to lending for home buying but the Council for Mortgage Lenders said there had been a rush in July for fixed-rate mortgages, accounting for 55 per cent of lending, up from just 22 per cent earlier this year.

In contrast to mortgage borrowing, growth in consumer credit lending slowed in July, rising by £1.5bn, down from £2.2bn in June, and below analyst expectations of £1.8bn. Total net lending for July stood at £9.89bn, only slightly below June's record figure of £9.93bn.