New house purchase mortgage approvals lifted to their highest level in almost two years, up 2.3% to 62,000 in July from a month ago, data from the Bank of England shows.

Approvals were last higher in September 2022 when they hit 65,100, according to the central bank’s latest Money and Credit report.

By contrast, remortgage approvals fell 8.1% to 25,100 last month from June, continuing their downward trend since March.

The study added that consumer mortgage lending rose 7.7% to £2.8bn in July, also the highest since November 2022, when borrowing hit £3.3bn.

British lenders approved the most mortgages for house purchases since September 2022, when the market was rocked by the financial chaos unleashed by former Prime Minister Liz Truss and former Chancellor Kwasi Kwarteng’s “mini-budget”.

The annual growth rate for net mortgage lending rose to 0.6% in July, following a rise to 0.5% in June, continuing the trend seen in previous months.

Gross lending fell to £19.6bn last month from £20.5bn in June, while gross repayments declined by £0.9bn over the same period, to £17.4bn.

The data covers the period before the central bank cut the base rate by 0.25% to 5% this month. This moved the rate from a 16-year high and was the first reduction in four years.

Bluestone Mortgages strategy director Ryan Davies says: “Today’s mortgage approvals suggest that consumer confidence remains buoyant.

“At a time when interest rates have finally fallen from their 16-year historic high and lenders are ramping up the competition to drop their rates, we expect to see demand continue into the latter half of this year.”

Octane Capital chief executive Jonathan Samuels adds: “Revised figures show that we’ve now seen two consecutive months of positive growth where mortgage approvals are concerned and this is in addition to the fact that monthly mortgage approvals have remained above the 60,000 threshold since February of this year.

“This suggests a property market that is very much on the up and we expect this outlook to only improve further following the Bank of England’s decision to cut interest rates for the first time in four years.

“While the reduction itself may have been marginal at 0.25%, it’s likely to act as a floodgate moment for the housing market, with more buyers looking to make their move as the monthly cost of a mortgage continues to ease.”