According to figures released by the Council of Mortgage Lenders (CML), 25,300 loans to first-timers were completed during the month, a 41% rise on July 2012, while the average LTV for these mortgages grew from 81% to 82%. At the same time house purchase loans grew by 21% but remortgage figures were up a more modest 8%.

The CML said that despite the growth the remortgage market was still far behind historic levels.

Ben Thompson, managing director of Legal & General Mortgage Club, said a combination of growing confidence in the market and the availability of higher LTV mortgages had been behind the increase in first-time buyers.

“Another healthy rise reflects the steep jump in activity levels earlier in the year,” he said.

“First-time buyers now feel as though they have a chance of buying a new home. This is in part due to a few more competitive rates, but moreover the ability to buy with a smaller deposit.

“The mover data looks a little healthier too. However, this segment of the population in many areas remains stuck, due to the triple whammy of Stamp Duty, tighter mortgage underwriting and reduced housing equity. “All eyes shortly will look towards remortgaging, and when this market will return. Talk of rising interest rates will also stir some borrowers into action at some stage, even though base rate will remain stuck for quite some time yet.”

Buy-to-let lending was also on the increase with 15,200 loans advanced during July, covering more than £2bn worth of business.

George Spencer, chief executive officer of online lettings company Rentify, said that landlords were looking to buy more houses to take advantage of low interest rates.

“Landlord optimism is at its highest level in several years, thanks to strong rental yields, low mortgage rates and the general recovery in the housing market,” he said.

“Both experienced and novice investors alike are taking the plunge and expanding portfolios or getting into buy-to-let for the first time, while there is strong growth in buy-to-let remortgaging as existing landlords take advantage of ultra-low rates. This also demonstrates that many are investing for the long term, which is good news for the sector.”