The number of mortgage approvals across the market totalled an estimated 54,700 in June, the highest since October last year, according to figure from the Bank of England (BoE).

June’s figure is still below the monthly average for 2022, which stood at 62,700 per month.

Approvals for remortgaging, which only capture remortgaging with a different lender, registered a significant increase from 34,100 in May to 39,100 in June.

According to the latest Money and Credit figures published by the BoE, net borrowing of mortgage debt by individuals increased to £100m of net flows in June after net repayments of £100m in May, and record high £1.1bn net repayments in April – if the period since the onset of the Covid-19 pandemic is excluded.

The BoE also reported that gross lending increased for the second consecutive month, from £19.0bn in May to £20.0bn in June. Similarly, gross repayments increased from £19.0bn in May to £19.8bn in June.

Chief revenue officer at Phoebus Software, Adam Oldfield, said that the figures from the BoE “tell two distinct stories”.

“One that shows that no matter what the naysayers believe there is still an appetite to purchase property,” he commented. “The other story is perhaps what we have been expecting to see, that consumers are starting to rely more on credit as the rising cost of living bites.

“On this Consumer Duty Day, when all financial services come under the spotlight, this level of consumer borrowing is the biggest indication to date that consumers are looking to spread the cost of their spending.

“It is an opportunity for everyone in our industry to show that everything we do is with our clients’ very best interests at heart. For lenders especially, this is a time to ensure that all the right systems and people are in place to ensure Consumer Duty is at the forefront of everything they do going forward.”

Senior personal finance analyst at interactive investor, Myron Jobson, said: “The increase in mortgage lending and mortgage approvals shows there remains a healthy appetite among buyers to get sales done despite the well documented affordability pressures.

“Remortgage activity also edged higher – although the dataset only captures remortgaging with a different lender. The uptick in remortgage approvals could suggest that homeowners were keen to get deals on the table, which usually valid for up to six months, as storm clouds brewed over the mortgage marketplace. It could be a sign of things to come, with mortgage deals ticking lower amid expectations that interest rates won’t rise as high as feared following the lower than expected fall in inflation in June.

“The fact remains that recent housing market activity pales in comparison with the summer seasons of yesteryear because of the housing affordability squeeze. With mortgage rates likely to remain high for the foreseeable future, affordability is the key challenge facing borrowers.”

The BoE also published figures for the consumer credit market, revealing that net borrowing of consumer credit by individuals rose to £1.7bn in June, following a £500m decrease in May. This is the highest net consumer credit borrowing since April 2018 (£1.9bn).

Borrowing on credit cards remained stable at £600m, while borrowing through other forms of consumer credit, such as personal loans and car dealership finance, increased significantly from £500m in May to £1.0bn in June.

Jobson added: “Consumer borrowing soared to a five-year high in June as budgets continued to be weighed down by the prolonged cost of living crisis. While there is an element of people resorting to borrowing to bridge the gap between income and expenses with the cost of essential expenses such as food, energy and housing remaining elevated, a closer look at the figures suggests that all is not as it seems.

“The amount of expenses put on the plastic remained stable at £600m in June, but other forms of consumer credit like car dealership finance and personal loans increased significantly from £500m in May to £1bn in June. The BoE doesn’t offer an exact breakdown of the credit products that come under the ‘personal loan’ banner, but any uptick in credit products, like car dealership finance, which can’t go towards footing the cost of everyday essentials underlines the polarised cost of living experiences between the ‘haves’ and ‘have nots’.

“In any case, while borrowing may provide temporary relief, it can also exacerbate financial challenges if not used wisely.”

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