Mortgage lending rose to its highest level for nearly a year last month as landlord activity in the buy-to-let market picked up, according to new figures from the Council of Mortgage Lenders (CML).

Gross mortgage lending totalled £12.8bn in June, up 16% on the £10.8bn lent in May, and the highest in a month since July 2010, although the total was 3% lower than June last year.

Over the last three months, mortgage advances rose by 11% to £33.5bn compared with the first quarter, but was 3% lower than the comparable three months in 2010.

CML chief economist Bob Pannell said the uncertainties surrounding the economy continued to affect potential home buyers, though the strong rental market was sparking some demand. “Landlord activity appears to have picked up recently and with evidence of strong rental demand this should help to underpin activity over the coming months”, he said.

The CML expects higher arrears and repossessions through the second half and into 2012 but Pannell added that talk of widespread repossessions was overplayed given that large interest rises are unlikely for the foreseeable future.

The CML, which speaks for the lenders of 94% of UK mortgages, added that over the first half of 2011, mortgage lending totalled £63.7bn compared with £64.1bn in the first six months of 2010.