Mortgage approvals hit 80%

The August Trends in Lending report from the Bank of England also showed the number of available mortgages at over 90% LTV has stayed virtually flat after small increases in May and June.

The Bank covered lending data from Barclays, HSBC, Lloyds Banking Group, Nationwide, Santander and Royal Bank of Scotland. It found that over the last few months, the appetite of these lenders to lend at higher LTVs has not increased.

Net mortgage lending advances fell from £1.9bn in June to £1.5bn in July. Gross mortgage lending increased in July with lending rising slightly from £9bn to £9.5bn. However, the bank said this rise was outweighed by an increase in mortgage redemptions.

David Brown, commercial director at LSL Property Services, said remortgaging and total mortgage volumes were languishing as most of lenders' available mortgage funds were directed to home purchases as opposed to remortgaging.

He said: "Lenders must continue to favour homebuyers rather than existing homeowners and the extension of the quantitative easing programme by the Bank of England should give them the tools to do so."