July saw a 5 per cent rise in mortgage lending, although the market was down 3 per cent from July of last year. What does this mean? The housing market is slowing down. The Council of Mortgage Lenders (CML) forecasted 140 billion pounds of lending for this year and so far figures are in line to meet that forecast.

CML economist Paul Santer commented on the industry saying: "It is difficult to see anything other than a slow market for the rest of this year as underlying activity remains subdued. The rest of 2010 is likely to see rather lower lending and transaction numbers compared to the same period last year.

He added: "But for most homeowners, the situation is not that bleak. The vast majority of households continue to pay their mortgages in full every month, and many have benefitted from the record low interest rates. This looks set to continue for some time yet. While there are a range of risks to the outlook, low rates will further help most stay on top of their finances."

Brian Murphy, head of Mortgage Advice Bureau, remarked on the rest of this year, saying: "Although the MPC voted 8-1 in favor of keeping rates on hold again this month, inflation remains above target and with unemployment likely to rise in the autumn in the wake of public sector cuts, many borrowers are avoiding base rate complacency.

The predominant figures during the month of July demonstrated that variable rate mortgage numbers are fleeting and fixed rate mortgages are more popular among borrowers. Also, as Loan to Value ratios are rising, it is evident that competition among lenders is increasing, only to benefit recovery.

Jeremy Cook, economist of World First cautioned those who believe the industry is close to normally functioning again, saying: "This is very surprising and flies in the face of recent consumer confidence measures. I always suspected that the summer months would deliver a strong showing for the UK economy. However, this is likely to be the best we will see for a while. With the spending review just around the corner, I expect consumers will tighten their belts for fear of how the cuts will affect the average family."