Net mortgage lending decreased slightly to £5.1bn in July, from £5.3bn in June, according to the Bank of England.

This is above the pre-pandemic average of £4.3bn in the 12 months up to February 2020.

The Bank added that gross mortgage lending increased to £26.1bn in July from £24.6bn in June, and gross repayments increased to £20.8bn, from £19.4bn.

Approvals for house purchases, which the bank said is an indicator of future mortgage borrowing, increased slightly to 63,800 in July, from 63,200 in June. However this is below the 12-month pre-pandemic average up to February 2020 of 66,800.

Graham Cox, founder of SelfEmployedMortgageHub.com, said: “Mortgage approvals are still strong, just shy of pre-pandemic 2020 figures, but these numbers really reflect people applying for a mortgage in the spring. I expect transaction levels to tail off considerably over the coming months and even next spring, as the full force of rising costs strangles demand.”

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Marcus Wright, MD of Bolton Business Finance, agreed: “While the housing market is still looking resilient for now, it takes longer for changes to the base rate and other economic factors to have an effect. However it’s likely mortgage borrowing will start to decrease heading into winter as the cost of living crisis starts to bite and potential further base rate increases slow down the property market.”

Remortgage rise

Remortgaging increased to 48,400 in July, from 43,300 in June, according to the Bank of England figures.

Andrew Montlake, managing director of the broker, Coreco, said: “The uptick in remortgages is no surprise, as people seek to reduce their single largest outgoing ahead of the storm. The annual growth rate in credit card use will not go unnoticed by policymakers. It’s a clear sign of the stress millions of households are under.”