This record level of lending was up from £25.7 billion seen last June and is higher than the previous monthly high, set in May, of £29.1 billion.
The CML said lending usually strengthened in June reflecting the pick-up in house buying activity in the Spring months, and the 11 per cent month-on-month rise was broadly in line with previous June increases.
CML director-general Michael Coogan, said: “The figure reflects the seasonal rise in house buying, strong house price growth and high levels of remortgaging activity. The strength of the London market is also a factor, with property prices and mortgages substantially higher than in other parts of the UK. The level of mortgage approvals shows that demand for houses and remortgages remains strong, so we expect to see continued robust lending during the Summer months.”
However, Coogan warned that with inflation above the Bank of England’s (BoE) target, the risk of interest rates rising was more likely and could moderate lending towards the end of the year.
The Building Societies Association (BSA) also released figures showing gross advances and net approvals were the highest June figures on record.
Building society gross advances were £5,136m in June, compared to £3,988m in June 2005. Approvals were £6,046m in June, up from £4,327m in June 2005.
Adrian Coles, director-general of the BSA, agreed that lending would continue to be strong into the second half of the year, but cautioned: “Given the optimism in the market we would remind potential borrowers not to over commit themselves, especially as inflationary pressure could signal a rate rise later in the year.”
