mortgage lending soared to a new record during June boosted by renewed demand from house buyers.

The Bank of England said total mortgage lending was £21.88 billion, up from £20.49 billion in May.

Net lending, which strips out redemptions and repayments, also reached a new record of £7.81 billion, suggesting the surge in lending was driven by people buying houses, rather than just people remortgaging.

Approvals for home loans were also strong, reaching a new high of £24.58 billion, with 108,000 mortgages approved up from 91,000 the previous month.

Unsecured lending was also strong with consumers borrowing a total of £17.4 billion on credit cards, loans, hire purchase agreements and overdrafts during the month - the highest figure yet.

Once repayments were taken into account, unsecured debt rose £2.16 billion, compared with a jump of £1.87 billion in May.

Within this total credit card lending increased by £861 billion.

Britons now collectively owe £50.19 billion on their plastic and £164.37 billion on all unsecured debt, as well as £713.78 billion in mortgages.

Bruce Jackson, managing director of financial web site The Motley Fool, said: "These figures make for scary reading. At the end of June 2003, Britons collectively owed a colossal £878 billion."

Wednesday July 30, 2003