More money was lent for mortgages in July than in any other month for seven years.

That is according to the Council of Mortgage Lenders (CML), which yesterday predicted that gross lending in July reached £22bn.

CML economist Mohammad Jamei said: “At £22bn, our estimate of gross lending in July is the highest monthly total for seven years, but is in line with our expectations that lending would strengthen in the second half following subdued activity earlier in the year.”

The figures would appear to be in stark contrast to e.surv’s predictions, revealed by EYE on Tuesday, which said that July actually saw a dip in the number of mortgage approvals.

e.surv predicted that July saw a drop of 1.8% in the number of approved mortgages compared to June, but the CML estimated that its figure of £22bn will be up by around £2bn on June’s actual figure.

Jamei added: “We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers.

“Today’s data is in line with our forecast that gross lending will rise to £209bn this year, 3% higher than in 2014.”

The CML has also predicted that:

• Housing and mortgage market activity should continue to be supported by a strong economic backdrop as we head into the second half of the year, with low unemployment, near zero inflation and strong pay growth.
• A shortage of properties on the market coupled with house price levels which are already elevated and continuing to outpace earnings across much of the country, will weigh on activity.
• After a rate rise was briefly touted as a possibility in 2015, expectations of the first rate rise have receded towards the middle of 2016.

The CML market commentary report said: “Over the past few months activity has picked up and approvals data suggests this is likely to continue into the second half of the year. This was in contrast to 2014 where activity started the year strongly and began to slow after the first quarter.

“Demand in the housing market looks set to remain strong, underpinned by a recovery in the economy. Consumer confidence has bounced back recently with people more confident about personal finances and the economy, mortgage rates remaining close to historic lows, wage growth continuing to be robust and approvals for house purchases at their highest level since the start of 2014.”

GDP grew by 0.7% in the three months to June, with the Bank of England now expecting the UK economy to grow by 2.8% this year, up from the previously forecast 2.5%.

Regular pay is also up 2.8% on last year, and coupled with zero inflation the CML said this meant workers, and potential buyers, had experienced “the highest boost in real terms since 2007”.