Buoyed by home-owner house purchase lending and in particular the growth in first-time buyers, gross UK mortgage lending increased by 12% in July 2113 to £16.7bn - an increase of 29% on July 2012, according to the Council of Mortgage Lenders (CML).

Buy-to-let lending continued to rise with 15,200 buy-to-let loans advanced in July 2013, an increase of 12% compared to June 2013, at a total value of £2bn, which was 11% higher than in June.

Stephen Johnson, Managing Director, Commercial Mortgages, Shawbrook Bank: “This morning’s announcement of the rise in buy-to-let lending is great news. However, as an industry we must be careful to not create another bubble. At the moment lending conditions are very good but these are unusual times and the UK needs to create a sustainable market, not one lurching from peak to trough. Those looking to buy property need to ensure they look at the long term – investors need a portfolio that can still work in a more normalised interest rate environment. Sensible gearing will maximize returns, but over-gearing now could potentially put at risk investors’ hard-earned equity.”

Buy-to-let lending for house purchases rose by 7% in July compared to June, resulting in 7,600 loans. The value of these loans was £900m, up 13% from June. Buy-to-let remortgaging also went up and was 24% higher in July than in June, representing a value of £1.1bn. It equated to 7,200 loans in July, an increase of 13.4% on June.

Total home-owner house purchase lending grew by 9% on June and 21% on July last year whilst first-time buyers took out 25,300 loans in July, an increase of 5% on June and of 41% compared to July 2012. Home movers took out 32,000 loans, an increase of 12% compared to June and up 9% on July last year.

Paul Smee, director general of the CML, said: "The notable feature is the catch-up in home mover activity. For only the second time this year the monthly growth of movers exceeded the growth in first-time buyers. This is a positive sign of a mortgage market where obstacles to transactions are now reducing."