Mortgage lending to homeowners jumped 17 per cent in June according to new figures, but economists remain cautious over the strength of the property market.

The Council of Mortgage Lenders (CML) said that gross mortgage lending hit a six-month high of £12.3 billion in June, up 17 per cent from £10.5 billion recorded in May.

However, the figures, which include lending for house purchases and re-mortgaging, were tempered by more gloomy economic news from the Bank of England showing that lending to businesses has fallen for a second consecutive month.

The Bank's Trends in Lending report showed that net lending to businesses in May fell by £3.4 billion following a £6 billion fall in April.

The figures, which draw on information from Britain's top six banking groups, pushed the annual rate of growth down to 0.1 per cent in May from 1.1 per cent in April.

But the Bank calculated that gross mortgage lending picked up to £9.2 billion in June from £8.6 billion in May.

Paul Samter, an economist at the Council of Mortgage Lenders, stressed caution over the group's figures. He said that the rise was in large part a reflection of 'seasonal factors'.

He said: "The combined effects of the restricted nature of mortgage funding, reduced numbers of active lenders, weak labour market and limited consumer demand are likely to hold back any significant and underlying improvement."

Howard Archer, chief UK and European economist at IHS Insight, also sounded a cautious note. "The CML data suggests that while buyer interest has picked up markedly in recent months as at June this was still only gradually translating into increased house sales. Consequently, housing market activity is still very low by past norms."

He forecasts that housing market activity will "remain muted compared to long-term norms for some time to come".

The CML's forecast for gross mortgage lending this year, of £145 billion, remains unchanged.

Yesterday, RightMove, the property website, said that the market had bottomed out after publishing data showing that property prices in England and Wales rose by nearly £1,500 this month while the number of sellers jumped by a fifth.

The average home is being put on the market with a price tag of £227,864, up from £226,436 in June and the fifth rise in the past six months, RightMove found.

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