Mortgage demand in July held firm, according to new figures from the British Bankers' Association (BBA).
Data from the body shows gross mortgage lending for last month rose 12 per cent on a year ago to £21.3 billion and, with annual house price inflation below this rate, the BBA claims that the stronger figure reflects greater remortgaging activity.
Underlying net mortgage lending increased by £5.7 billion, beating June's increase and the recent average, both at £5.4 billion.
In total there were 182,950 mortgages approved for all purposes, worth £21.5 billion, with the average loan for house purchase at £156,900, up 13 per cent on a July '06.
House purchase approvals rose one per cent in number and 12 per cent in value on a year ago, while remortgaging was up 12 per cent by number and up 26 per cent by value. Equity release saw a fall of two per cent by number and an increase of ten per cent by value.
David Dooks, BBA director of statistics, said: "With customers seeking to replace deals or fix their mortgage costs, increased remortgaging activity boosted the banks' lending in July.
"Lower approvals volumes simply reflected the seasonal pattern, so we expect the stable trend in the banks' lending to continue over the next couple of months."
Meanwhile, credit card borrowing fell £82 million with spending rising eight per cent to £7,663 million. Borrowing from personal loans and overdrafts increased by £223 million.
"Spending on credit cards was eight per cent higher than in July last year, but because cardholders are at least matching their spending with repayments, card borrowing continued to decline," Mr Dooks explained.
Commenting on the figures, the Royal Institution of Chartered Surveyors (Rics) claimed that the BBA figures point to slower housing market activity that will rein in house price growth in the run-up to Christmas.
Oliver Gilmartin, Rics senior economist, said: "This will temper the sentiment that has supported consumer spending in recent months and which the Bank of England had identified as an upside risk to inflation.
"Tightening borrowing standards in response to sub-prime concerns could intensify the current slowdown in lending activity over the next six months. Equally, those trying to get a foot hold on the property ladder may need to stump up higher deposits to allay the fears of lenders."