Lenders report 5% monthly rise but activity still 27% down over the year

Mortgage lending in July rose slightly but was still considerably lower than a year earlier, shows new figures.

The Council of Mortgage Lenders (CML) reported a 5% monthly rise in gross mortgage lending in July to £24.8bn, but this was 27% down on the amount lent in July 2007.

The CML, whose members together undertake around 98% of all residential mortgage lending in the UK, predicts that lending will continue to be subdued through at least the second half of this year.

So far this year, the bulk of lending has tended to be remortgaging rather than borrowing for house purchase.

"While there was a small month-on-month increase in activity, it represented a notable decline from a year ago," said Bob Pannell, head of research at the CML.

"This continues the weaker picture seen in June and points towards the more subdued levels of lending we are likely to see in the second half of 2008."