By Marcus Leach

Data released by the Council of Mortgage Lenders (CML) shows that mortgage lending in June increased, but was still lower than the same period in 2010.

Figures show that total lending to home owners was £12.9 billion in June, up by 16% from May but 3% down on June last year.

According to the CML the current state of lending reflected the poor state of the economy and household finances.

"The UK economy continues to experience disappointing economic growth, strong consumer price pressures, falling disposable incomes and an uncertain jobs market," said the CML's chief economist Bob Pannell.

"Recent emotive headlines on repossession prospects appear overplayed, given that the state of our economy does not warrant large interest rate rises for the foreseeable future.

"But we do expect to see moderately higher arrears and possessions through the second half and into 2012, as we have previously forecast," he added.

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