By Richard Harris

LONDON (Citywire) - The mortgage market showed faint signs of recovery in July with gross lending up 5% from June's low according to the latest figures from the Council of Mortgage Lenders, but it was still down 27% year on year.

Lending totalled an estimated £24.8 billion in July. Bob Pannell, head of research at CML, (CML.L: Quote, Profile, Research) played down the slight gain calling it a ‘notable decline' from last July's £34.2 billion.

‘This continues the weaker picture seen in June and points towards the more subdued levels of lending we are likely to see in the second half of 2008,' he said.

The figure is the highest since April, when lending totalled £26.1 billion. The modest gains provide a glimmer of hope for mortgage brokers, whose numbers fell by 15% in the 12 months to June.

The CML recently joined the Association of Mortgage Intermediaries in calling for the government to take action to prevent problems in the mortgage market affecting the wider economy.

(c) Citywire Financial Publishers Ltd 2008.