Figures from the Bank of England’s latest credit conditions survey showed the increase, which followed three successive quarters of decline.

The availability of credit in April, May and June was higher than before, with this expected to increase further in the coming months.

The typical loan-to-value and loan-to-income ratios were steady compared to the previous survey.

Banks and building societies reported that the number of homeowners in arrears dropped in the quarter and is expected to fall further as the year progresses.

Mark Dyason, director of Edinburgh Mortgage Advice, warned borrowers holding out for a good deal that rates may have hit rock bottom.

“Mortgage rates have continued to fall throughout 2015 and, at lower loan-to-values, it’s hard to imagine them going much lower. There is, as this report suggests, more room for rate improvements at higher loan-to-values,” he said.

“The MMR has placed considerably more emphasis on affordability and it’s the background stress tests that are preventing some people, especially first time buyers, from getting a loan. Lenders are much more forensic in their underwriting and this has seen a rise in the number of rejections that would probably have passed pre-MMR. This has opened the doors to the ever-growing number of challenger banks and lenders that see the borrowers many lenders avoid as perfectly viable.

“Lending is likely to pick up in the second half of 2015, as lenders look to catch up on their targets. Remortgages will drive a lot of this activity as a number of major lenders have large rate cessations. In other words, a lot of people will be finishing their existing rates and moving onto their SVR. If you can pass a lender’s stress tests, you enter, in many cases, a rate nirvana.”