There was a fall in net mortgage borrowing last month, the latest Bank of England figures show.

The data reveals that net bowing fell from £5.3bn in June to £5.1bn in July. However, this is still above the pre-pandemic average of £4.3bn in the year to February 2020, while gross lending actually increased in the month to July 2022, rising from £24.6bn to £26.1bn.

The Bank of England also revealed that residential property purchase numbers rose in July, from 63,200 to 63,800, and from £14.8bn in value to £15.3bn.

Meanwhile, remortgage approvals spiked, going from 43,300 to 48,400 – an increase in value from £14.8bn to £15.3bn.

Jason Tebb, Chief Executive Officer of OnTheMarket.com, said: “Net borrowing of mortgage debt by individuals decreased slightly in July compared with the previous month but remains above the 12-month pre-pandemic average. Meanwhile, approvals for house purchases, an indicator of future borrowing, increased slightly although this number remains below the 12-month pre-pandemic average.

“With the highest level of stock available in July compared with any time during the previous 12 months, we’re seeing the beginning of an inevitable rebalancing of supply and demand in the market. Remarkable confidence prevails despite considerable headwinds as committed property seekers remain determined to move before mortgage rates rise further still.”

Hina Bhudia, partner, Knight Frank Finance, commented: “The Bank of England data reveals clear signs that rising rates, economic headwinds and stubbornly low stock levels are weighing on activity. Lenders’ rapid repricing of products that characterised spring and summer appears to have slowed a little, giving borrowers a little more time to consider their options, though with more hikes around the corner that could be a temporary lull.

“The market is rife with nerves. We’re getting large numbers of calls from borrowers with mortgages soon up for renewal that are worried about their mortgage payments. These are often people that locked in two-year fixes of between 1.2% and 1.8% a couple of years ago and are now facing fixed rates of anywhere between 3.2% and 3.5%. That’s a huge jump for most people and will be equivalent to hundreds of pounds a month in extra costs on average loan sizes.”