Mortgage lending hit £3.5bn in May, above the six-month average, Bank of England figures show.

The net lending figure was above the previous six-month average of £3.2bn, and was up 2.9% annually.

Mortgage approvals for house purchase were broadly stable at 65,202, up from 65,051 in April, below the six-month average of 66,990.

Approvals for remortgaging increased slightly from 40,437 to to 42,955, still below the average of 44,069.

Commenting on the figures, Alastair McKee, managing director of mortgage broker One 77 Mortgages, said: “People are increasingly feeling the financial squeeze and they are also worried that rising inflation could force the Bank of England’s hand on interest rates.

“As a result, locking into a fixed rate of two or even five years is becoming more of a priority for people.

“What people are also increasingly aware of is that they can secure a new mortgage offer up to six months in advance of their current deal ending.

“There’s a whole new level of flexibility in the mortgage market that borrowers are now able to tap into.

“Beyond the increase in remortgage activity, the narrative of strong first-time buyer activity and weaker demand from landlords remains much the same.

“It’s a trend that is likely to continue throughout 2017 and perhaps well into next year.”