Mortgage approvals for house purchase surged to 66,300 in July, which was seven times higher than the 9,300 recorded at the lowest point in May, according to Bank of England data.

Approvals for purchase were also 66 per cent higher than June’s figure of 39,900.

Approvals for remortgage, which exclude internal switching, were little changed compared to June, at 36,000. 

They remain 30 per cent lower than in February.

Gross mortgage lending was £17.4bn in July, up 7 per cent from £16.3bn in June, but below pre-Covid levels of £23.7bn recorded in February.

MT Finance commercial director Gareth Lewis says: “There are positive signs indicating plenty of consumer confidence out there as people are borrowing money. 

“There are more ‘for sale’ and ‘sold’ signs springing up, and even tales of gazumping.  

“August’s numbers will show even more of an uptick in transactions once the stamp duty holiday starts to filter through to the figures.

“While July’s numbers show an improvement on June, they would have been better still if transactions weren’t taking so long. 

“Lenders still have staff furloughed or working from home, and it is taking them too long to process applications. 

“This isn’t going to change for a while yet as they don’t have the capacity to bring everyone back to the office. 

“With many surveyors only just coming back off furlough as well, this is having a negative impact on turnaround times.” 

North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: “Mortgage approval numbers always provide a useful lead indicator of direction of travel for the property market in the coming months. 

“Unfortunately, these figures relate to the period when we were emerging from lockdown but before the full benefit of the stamp duty holiday was being felt. 

“Contact with mortgage brokers or lenders is not always the first thought of aspiring buyers. 

“As a result, these approvals do not reflect the stronger upsurge we noticed across most property types and price ranges from the beginning of August.”

Andrews Property Group head of financial services Sam Harhat says: “Mortgage approvals in July may have been up sharply on June but expect them to tail off again in August to reflect the significant tightening of lender criteria.

 “Over the past month or so, it’s as if the property and mortgage markets have been operating in two entirely different realities.

 “The demand for property is exceptionally strong, a result of pent-up demand, the low cost of borrowing and the stamp duty holiday, while the availability of mortgage finance has been contracting by the day.

 “For 75 per cent loan to value mortgages and below, there is a huge amount of lender competition, but at higher LTVs finding a lender is like looking for a needle in a haystack.

“Where borrowers see opportunity, lenders see growing economic uncertainty, especially in the Autumn as the furlough scheme draws to a close.”