A SURGE in the number of people buying homes helped boost mortgage lending to a new record last month, figures showed.

During the month, a total of £29.2bn was loaned, overtaking the record of £28.2bn set the previous month .

The Council of Mortgage Lenders (CML) said the figure was driven higher by the large number of loans for house purchase.

A total of 131,000 mortgages were given to people buying a home, the highest figure since August 2002, worth a record £14.7bn and accounting for 50 per cent of all lending during the month.

But the group said the figures did not yet reflect the rises in interest rates seen during the past few months.

CML director general Michael Coogan said: ''While these figures do not reflect the full effects of recent interest rate rises, they clearly do show that there was a strong seasonal revival in the house purchase market this spring.

''Estate agents are continuing to report a slowdown in current activity in their offices, but this will not be reflected in lending figures for a few months.''

The figures came as property website Rightmove provided further evidence that the housing market was slowing.

The group said nearly £4,000 was wiped off the price of the average home during the five weeks to August 14 as higher interest rates continued to take their toll on the market.

It said the North-East was also affected by the slowdown in annual house price inflation.