Mortgage lending rose to its highest level for nearly a year last month as landlord activity in the buy-to-let market picked up, figures have revealed.

Gross mortgage lending totalled £12.8 billion in June, up 16% on the £10.8 billion lent in May, and the highest in a month since July 2010, although the total was 3% lower than June a year ago, the Council of Mortgage Lenders (CML) said.

Over the last three months, mortgage advances rose by 11% to £33.5 billion compared with the first quarter but was 3% lower than the comparable three months in 2010.

CML chief economist Bob Pannell said the uncertainties surrounding the economy continued to affect potential home buyers, though the strong rental market was sparking some demand.

"Landlord activity appears to have picked up recently and, with evidence of strong rental demand, this should help to underpin activity over the coming months," he said.

The CML expects higher arrears and repossessions through the second half and into 2012, but Mr Pannell added that talk of widespread repossessions was overplayed given that large interest rises are unlikely for the foreseeable future.

The CML, which speaks for the lenders of 94% of UK mortgages, added that mortgage lending in the first half of 2011 totalled £63.7 billion compared with £64.1 billion in the first six months of 2010.

Britain's housing market has struggled due to the general economic uncertainty and a lack of mortgage availability, especially for first-time buyers. The difficulties in getting a mortgage have prompted a surge in demand for rental properties, with more mortgage products available to landlords.

The National Landlords Association (NLA) said there has been an increase in buy-to-let mortgage products in recent weeks and the appearance of several major finance providers, coupled with high demand for rental properties, has encouraged many landlords to increase their property portfolios.

Richard Price, director of operations at the NLA, said: "Competition for quality rented accommodation is currently very high. It is likely that before the end of this decade one in five households will rent privately."