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Mortgage lending jumped 26 per cent in July according to the Council of Mortgage Lenders (CML).  Gross lending rose to £16 billion in July, up from £12.7 billion in June but was still a third lower than the £25 billion lent in July 2008.

The CML characterised the result as: "Further evidence of a modest improvement in the market over the summer after an exceptionally weak winter", but said that it had not revised its forecast for £145 billion of gross mortgage lending this year.

The news was followed by the latest ‘Trends in Lending' report from the Bank of England.  The report now includes information from the Lending Panel which was set up by the Chancellor of the Exchequer late last year to monitor lending to the UK economy.  The banks contributing to the Lending Panel include most of the high street big hitters such as Santander, Barclays, HSBC, Lloyds Banking Group, Nationwide and the Royal Bank of Scotland.

The report shows that the proportion of mortgage applications approved by lenders has risen from 70 per cent earlier this year to 80 per cent today.  Nevertheless, mortgages for 90 per cent or more of the purchase price remain rare as banks take a more cautious view of the risks involved.  Nevertheless, some banks argued that greater stability in house prices and the reduced risk of negative equity that implies together with greater competition among lenders, especially those in part public ownership, might reduce the relative cost of high loan to value mortgages later this year, a precursor to greater availability.