The Bank of England has reported that demand for secured lending for house purchase increased in Q2, but was expected to decrease in Q3.

Demand for secured lending for remortgaging slightly decreased in Q2, and was expected to be unchanged in Q3.

Meanwhile, lenders reported that overall demand for unsecured lending increased in Q2, and was expected to be unchanged in Q3. Within the overall figure, demand for credit card lending increased in Q2, and was expected to increase slightly in Q3. Demand for other unsecured lending was also reported to have increased, but was expected to decrease slightly in Q3.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Continued strong activity in the housing market is reflected in these figures with demand for mortgages increasing in the second quarter, although this is expected to decrease in the third quarter as the froth continues to come out of the market. Remortgaging activity slightly decreased, which is surprising as many borrowers have been keen to secure fixed rates in the face of rising interest rates.

“Spreads narrowed slightly as lenders absorbed some of the rising cost of borrowing. However, lenders reported that these are expected to widen in the third quarter as mortgage rates continue to rise.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Just like the UK economy, the housing market continues to defy expectations.

“Still unsatisfied demand is shrugging off concerns about the cost of living and rising interest rates. But we know, on the ground, that the market is changing as transactions are reducing and lengthening. Lack of choice is continuing to underpin pricing.”