The number of house purchase loans recorded in August was up 29 per cent year-on-year, according to the Council of Mortgage Lenders (CML).

Some 53,000 loans were provided to UK consumers during the month, which was down five per cent on July's figure.

Overall gross mortgage lending, which includes all mortgage lending activity such as buy-to-let loans secured by private landlords, dropped 36 per cent compared to August 2008 - to stand at £12.3 billion.

CML economist Paul Samter said: "House purchase activity has revived from its moribund state at the beginning of the year. It will be a drawn out recovery process with seasonal ups and downs, but house purchase activity is now on a firmer footing."

He added that remortgaging demand has dropped since interest rates have dropped, which is having an effect on overall gross lending levels.

The CML announced in the summer that the decline in buy-to-let mortgage lending slowed during the second quarter of 2009, which suggested that the sector could be bottoming out.

Written by Mark Garner

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