June's approvals beat June's 66,582 and the average of 64,186 over the previous six months, according to the latest Bank of England Money and Credit report.
The number of approvals for remortgaging also rose, reaching 38,042 compared to 36,620 the previous month and an average of 33,759 over the previous six months.
Additionally, the report shows that net mortgage lending increased by £2.7 billion in July, even higher than June's £2.6 billion and the biggest increase since July 2008.
Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented:
“Mortgage approvals continued to climb in July, with the number of approvals for remortgage in particular seeing a significant annual increase. Bargain basement mortgage rates are attracting borrowers in their droves, and many are keen to lock into record low pricing before interest rates rise.
“Not only do remortgagers stand to make significant savings by switching to a competitive deal, many are in a strong position to cash in on the rising value of their home. Our own analysis shows that the average remortgage loan has reached a new post-recession high, with typical loan-to-values also increasing. Savvy borrowers are therefore increasingly making the most of house price rises by releasing money from their homes.
“The second half of the year is often a good time to look for a mortgage: lenders falling behind their annual targets will beef up their product offering to attract new business. This year, it may also be the last window of opportunity to get hold of a record low rate. Several lenders have edged up their pricing recently, and it won’t be too long before rates reach the bottom of the curve.”
Richard Sexton, director of e.surv chartered surveyors, added:
“The mortgage market has overcome the hurdles of regulatory changes and economic pressures, and lending is approaching post-recession record levels. The remortgage sector is moving from strength to strength, as homeowners look to capitalise on the cheap rates available. This remortgage revival, together with a combination of gradual wage growth and low inflation, is shoring up house purchase lending, and encouraging new homebuyers. The housing market is looking healthier than it has in years, and new housing initiatives are starting to boost housing stock, albeit slowly.
“Looking ahead, the China slowdown may hold back growth in the UK, but the bolstered housing market could still drive inflationary pressures. This could add a certain pressure to the market, and prudent homebuyers and homeowners may want to lock into cheap rates before they start to climb.”
