Gross advances totalled £25 billion - 12% higher than in June, and 18% higher than in July last year.
There appears to be some signs of a recovery in lending for house purchase, which bounced back to £11.6 billion in July from £9.7 billion in June - a rise of nearly 20%. Lending for house purchase in July was at its highest since August last year, although lower than last July's figure of £12.3 billion. Some 46% of all lending in July was for house purchase, the highest proportion since last December.
Nevertheless, remortgaging also remained extremely strong. At £10.7 billion the value of remortgaging was 5% higher than last month and the second highest monthly figure ever, despite accounting for only 43% of all lending compared with 46% last month.
Fixed rates once again increased in popularity. They accounted for 55% of lending in July, up from 53% last month and 22% a year ago. The average new fixed rate was 4.12%, against an average 3.96% variable rate.
July was also the best month so far this year for first-time buyers. Although they still only accounted for 30% of all loans for house purchase, the estimated number of first-time buyers rose to nearly 35,000. But affordability shows little sign of easing up - all buyers are borrowing higher income multiples than they were a year ago. To some extent this is offset by lower interest rates, although this is likely to be a temporary effect as the general expectation is that interest rates will rise next year.
Michael Coogan, CML Director General, commented: "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.
"We do not anticipate any shocks to the market that would cause serious problems. However, neither is the current buoyant situation likely to continue indefinitely - to some extent the market is making hay while the sun shines. We continue to expect house price inflation to slow down looking ahead into next year. The risks of a correction have not gone away, and borrowers should remain wary of over-committing themselves."
