Mortgage lending bounced back to a six-month high during June as the market enjoyed its traditional season boost, figures showed today.
A total of £13.1 billion was advanced during the month, 15% more than in May and the highest level since December last year, when lending levels were lifted by people rushing to beat the end of the stamp duty holiday.
But despite the increase, which left advances for the month 7% higher than in June 2009, the Council of Mortgage Lenders warned that activity was still subdued.
Lending levels for the second quarter were 17% higher than during the previous three months at £35.01 billion, although the figure remained down on the £38.49 billion advanced during the final quarter of 2009.
CML economist Paul Samter said: "Our gross lending estimate of £13.1 billion in June represents a seasonal pick-up and is higher than June last year, but is still indicative of low levels of activity.
"There are signs of house prices stabilising and more properties coming on to the market following the abolition of Home Information Packs.
"This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained."
The group has previously warned that its forecast for total advances this year of £150 billion is now beginning to look a "little optimistic".
Today's figures showing an increase in mortgage lending provide some rare good news on the housing market following a recent run of gloomy data.
Halifax reported that prices fell for the third consecutive month during June, as the market failed to pick up momentum following a subdued start to the year.
Other surveys have also shown that demand from new buyers is failing to keep pace with the number of properties now being put up for sale, relieving much of the upward pressure on prices.
Economists now generally expect house prices to be either flat for the rest of the year, or to lose the gains they made during the first half.