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Gross mortgage lending increases by 26% in July

However, activity remains subdued on any historic comparison; this is the lowest July lending figure since 2001 and £11billion lower than the July average over the previous seven years of £27billion.

CML economist Paul Samter said: "Most of the indices point to house prices rising modestly over the summer months. The CML’s July gross lending estimate of £16billion is the highest level in nine months and consistent with the rise in house purchase approvals.

"But the bounce-back in activity from the extreme weakness around the turn of the year, coinciding with a seasonal bounce, is limited in how far it can go against the current back-drop.

"We expect improved sentiment to support the market, but a further significant pick-up is unlikely with so many obstacles in place.

"As a result, we anticipate some seasonal slowing in lending volumes and housing transactions over the latter part of the year and the picture of a slow but more stable market to emerge."

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