Total gross mortgage lending in May increased to an estimated £14.7 billion, according to the Council of Mortgage Lenders (CML).

This represents a rise of 21% from £12.2 billion in April and is 17% higher than the total of £12.6 billion in May 2012. This is the highest monthly estimate for gross mortgage lending since October 2008.

CML chief economist Bob Pannell said: “The imminent change of guard at the Bank of England takes place against the backdrop of a modestly improving UK economy, albeit one that appears to rest upon a pick-up in consumer spending and a recovering housing market.

“Funding conditions, helped by the funding for lending scheme, continue to look favourable and are supporting more competitive mortgage pricing and availability and a gradual resumption of lenders’ risk appetite.

“While the direction of travel is clear and fits well with the more positive housing surveys from RICS and others, our forward estimate does imply somewhat stronger house purchase activity than we had been expecting. This may reflect a degree of pent up sales following the extended spell of poor weather earlier this year.”