Figures from the Council of Mortgage Lenders (CML) revealed lending in July increased by 7% on a monthly basis and 15% compared to July 2013 when gross lending for the month totalled £16.7bn.

Caroline Offord, market and data analyst for the CML, said that while mortgage activity remained robust at present there was still uncertainty over the eventual impact of the regulatory changes.

“Property transactions in the first half of the year showed a 25% increase compared to the same period a year ago but, as set out in our recent market forecast update, we expect intensifying affordability pressures could start to dampen this upward trend,” she said.

The CML’s cautious outlook on the longer-term effects of the MMR mirrors the warning which came from the Bank of England this month when it released its Inflation report.

The Bank said that the market could face a second slowdown in mortgage approvals as borrowers, constrained by the new affordability rules, were forced to rethink their property plans.

It said that while lenders may have got their staff and systems up to speed to cope with the MMR the rules could have more ‘persistent’ effects on borrowers.