In the three months to June, lenders approved 33,200 loans worth £3.9bn, up from 32,300 mortgages worth £3.7bn in Q1.

Year-on-year, the buy-to-let market continued to grow strongly with the volume of loans up 14% from 29,100. The amount advanced increased by 18% from £3.3bn.

The increase in buy-to-let lending was evenly split between loans for house purchase and remortgaging, with both showing a 3% increase in volume compared to the first quarter.

The CML said buy-to-let lending volumes remain around one-third of their peak in 2007.

The data showed a slight improvement in the performance of buy-to-let loans, with the proportion of borrowers more than three months in arrears declining from 1.69% at the end of the first quarter to 1.56% at the end of June.

In the owner-occupied sector, the proportion was unchanged at 2.05%. The proportion of buy-to-let properties taken into repossession was unchanged at 0.12%, while in the owner-occupied sector the data showed a small decline from 0.08% to 0.07%.

The CML said it is not surprising to see a lower rate in owner-occupied households, where there is a concerted effort to extend forbearance wherever possible.

CML data also found the number of mortgage repossessions in the second quarter of 2012 declined. At 8,500, the number of repossessions in the three months to June was the lowest since the final quarter of 2010.

The number of mortgages in arrears remained generally flat in the second quarter. At the end of June, the number of loans with arrears of 2.5% or more of the outstanding balance stood at 157,400, fractionally lower than the total of 157,800 at the end of the first quarter.

Levels of arrears in lower and middle bands were slightly lower than in the preceding three months but there was a small increase, from 28,000 to 28,300, in those mortgages with the highest levels arrears, of more than 10% of the balance.

The data show the number of repossessions totalled 18,100 in the first six months of 2012.

The CML’s director-general Paul Smee said: “The figures show that lenders, borrowers and debt advisers are working together to get through the current period of economic difficulty and keep mortgage possessions in check.

“Generally, when borrowers prioritise their mortgage commitments, lenders can provide help appropriate to their individual circumstances.

“But success in managing temporary payment problems depends on everyone working together, it is essential for anyone worried about their mortgage to talk to their lender as soon as possible.”