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Mortgage Lending Set To Hit Pre-Crash Levels

Mortgage lending is on track to reach £209bn this year, according to the Council of Mortgage Lenders (CML), which would mark the highest annual lending since 2008.

The new figures published on Thursday showed that around £22bn was lent for mortgages in the month of July.

This is an increase of £2bn on June, and up £2.6bn from levels recorded in July last year.

CML economist Mohammad Jamei said the rise was expected.

"At £22 billion, our estimate of gross lending in July is the highest monthly total for seven years, but is in line with our expectation that lending would strengthen in the second half following subdued activity earlier in the year," he said.

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"We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers."

The director of the Legal & General Mortgage Club, Jeremy Duncombe, attributed the boost not just to higher house prices but also to more homes being bought overall.

"The number of properties coming onto the market either through new build or by people moving house is not keeping up with the demand from people who are looking to move," he said.

"This imbalance will continue to push prices up as buyers have to compete over properties, which risks making homes less affordable.

"What the housing market needs is a greater supply of new homes.”

Separate figures published by the Office for National Statistics (ONS) suggest that the creation of these new homes might already be under way.

In the year to June 131,060 new homes were completed in England, a rise of 15% on the year before.

Similarly, the number of home completions registered for the April and June quarter was 22% higher than the same period in 2014.

But the news was not all good with the figures showing that there had been 1% fewer home builds started over the year with just 136,320 houses getting under way.