In July, 66,569 purchase applications were approved, down 1.5% from the average monthly approval rate of 67,563 seen over the last six months.

Remortgages fared better in July, up 1.7% on the six month average of 32,446 approvals to 32,983.

Net secured lending increased by £2.3bn in July compared to the average monthly increase of £2bn over the past six months. Overall gross lending secured on dwellings was £17.1bn.

Despite the uptick in net lending, and static approval levels, mortgage activity remained relatively subdued compared to pre-crisis levels in 2008 when monthly approvals were around 90,000.

Rob Wood, chief UK economist, Berenberg, said: “Tougher loan checks introduced in April have taken a toll on transaction volumes, though they have done little to affect national price inflation or the value of lending so far.

“These are still historically weak lending flows – the UK’s recovery is not debt driven yet – but the continued pick up suggests the domestic recovery remains on track.”

Mark Harris, chief executive of broker firm SPF Private Clients, said the growth in remortgage approvals showed borrowers were taking advantage of some the competitive rates still available for fixed rate mortgages.

“The hysteria surrounding the hiking of Bank Base Rate has subsided again, with the economic news since early August dampening down speculation.”

Harris said that although two members of the Monetary Policy Committee called for a rise in rates at the last meeting, the majority of members thought there was insufficient evidence of inflationary pressures to justify an immediate increase in base rate.

He added: “However, if borrowers are worried there are still some excellent fixed rates available and we expect remortgaging to be strong in coming months.’