MORTGAGE lending set another record last month as consumers continued to make the most of low interest rates, figures showed yesterday.

The Council of Mortgage Lenders (CML) said gross lending by banks and building societies reached £21.8bn in July, an increase of 41 per cent on the year earlier, and the best performance since mon-thly records began four years ago.

However, the CML said the figures for July were inflated by activity deferred from June because of the World Cup and Queen's Golden Jubilee celebrations.

Meanwhile, a Royal Institute of Chartered Surveyors (RICS) housing market survey for England and Wales said that the number of homes for sale had risen for the first time since last December

The number of surveyors reporting price rises compared to those reporting price falls stood at 53 per cent, down ten per cent from the previous month. This confirms reports from previous RICS surveys that the market is beginning to slow down.

A rise in supply has led to a slowdown in house price inflation, which rose at its slowest pace in five months, although overall increases still remain at more than double the long-run average.

The picture in the North of England was different, however, with surveyors still reporting a shortage of homes for sale and very high demand for the properties available.

Most surveyors expect sales to remain broadly the same, although new inquiries from potential buyers over the last month have fallen. The number of inquiries has been falling back since April, with falls in the stock market contributing to the uncertainty.

Looking ahead, fewer RICS members expect to see prices rising in coming months, a reflection of the quiet holiday period and the reluctance of potential buyers to commit because of the uncertain economic climate.