Gross mortgage lending totalled £24.8bn in July, up by +5% in June and down by -27% compared to July 2007, according to the Council of Mortgage Lenders (CML).

Bob Pannell, CML’s head of research, said: “While there was a small month-on-month increase in activity, it represented a notable decline from a year ago. This continued 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.”

Oliver Gilmartin, senior economist for the Royal Institution of Chartered Surveyors (RICS), believes the improvement in the monthly gross lending figure could offer some encouragement in what are typically slower summer months.

He said: “However, lending still remains -27% down on a year ago and access to mortgages still remains challenging. While banks are still in the process of repairing their balance sheets and as the securtisation markets remain effectively closed, mortgage lending is unlikely to recover in any meaningful way. Even though the base rate has come down by -0.75% since August 2007, those without higher deposits have seen little benefit with many first time buyers effectively shut out of the market. Despite the prospect of further interest rate cuts as the economy slows sharply into 2009, tighter lending standards look set to stay.”