Research by the data services section of the consumer credit reporting firm also found applications soared by as much as 13% in July compared to the same month in 2019.

Its data suggests 1.2 million mortgages will be agreed at a value of £216 billion this year. However, the pause in the market which happened during lockdown meant lending is still likely to be down on 2019’s £250 billion across 1.5 million loans.

The forecast was made based on research in Experian’s latest report, Lending with Confidence: A Data-Led Analysis of the Mortgage Market.

The report highlighted how the surge in mortgage applications had come at a time when lenders faced considerable challenges in ensuring the loans they offered were affordable for borrowers in the long-term.

Payment holidays

Experian noted 1.9 million mortgage accounts were currently subject to an Emergency Payment Holiday (EPH).

These mortgage accounts had an average balance of £150,000, 30% higher than the £114,000 owed by those who have not paused repayments, it said.

Circumstances for people on payment holidays also differed significantly, Experian found, with only half of those on an EPH seeing their disposable income decrease during the pandemic.

It said 25% of people on payment holidays had experienced an increase in disposable income as they had cut back spending elsewhere.

This suggested people in this group anticipated their income may change in the future, so had taken the chance to build resilience.

Lender responsibility

Lisa Fretwell, managing director of data services at Experian, said: “People moving home is good news for the economy, as activity in the property market fuels growth in related services. Tax incentives and an extended period indoors have encouraged people to make a move this summer, as our analysis shows.

“Most moves require a mortgage and, while lenders want to extend new loans, they have a responsibility to ensure homebuyers are only taking on what they can afford in the long-term.

“Covid-19 has complicated the financial situation for millions of people, and the challenge for lenders to understand each applicant’s circumstances has become more difficult as a result.

“Both traditional and new data sources will help lenders to make the highest quality decisions to keep Britain moving.”