Approvals for house purchases dropped from 80,300 in June to 75,200 in July, says the Bank of England in its latest Money and Credit report.

This is the lowest level seen since July 2020 but, the BoE adds, “remains above pre-February 2020 levels.”

Meanwhile, approvals for remortgages increased from 35,800 in June to 37,400 in July.

The BoE adds that individuals repaid £1.4bn of mortgage debt on net, which it explains is “relatively rate, with only one other repayment (in April 2020) in the past decade.”

This comes a month after record borrowing of £17.7bn in June, which the bank puts down to the initial tapering of the stamp duty holiday.

Alongside this, gross lending fell from £43.8bn to £16.5bn across the month, its lowest level since June 2020.

The effective interest rate on new mortgages dropped 12 basis points, to 1.83%, the BoE adds.

Coreco manging director Andrew Montlake says this net repayment is not only due to the stamp duty holiday tapering, but also “a result of the stupendously low rates on offer, which are seeing people remortgage in droves.

“The crazily low rate environment has also enabled people to repay off more of their mortgage than they may otherwise have been able to.

“Mortgage approvals were always going to fall after the stamp duty holiday as people switched their focus to the holidays but demand is still very much there. What’s lacking is the supply to match it,” he says.

And MT Finance director Tomer Aboody comments: “With the effective rate on new mortgages decreasing in July, borrowers are finding that the dream home they may not have been able to afford before is now within reach.

“The continued lack of stock is the issue for many as we head into autumn, as without some sort of extended stamp duty holiday for downsizers there is little incentive for older homeowners to move to a smaller property and free up family homes.”