Approvals for house purchase last month were up 24% over last May, according to the British Bankers’ Association (BBA).

Gross mortgage borrowing of £8.6bn in May was 7.5% higher than the recent monthly average.

In addition, remortgaging is up 17%.

BBA statistics director, David Dooks said: “New mortgage borrowing from the high street banks strengthened in May and approvals for both house purchase and remortgaging continued to rise. Unsecured consumer borrowing also saw a small net rise overall, in line with improved retail sales volumes.”

“SMEs use of their own high levels of cash resources and large companies’ use of alternative finance, means demand for bank borrowing is subdued and a reflection of challenging trading conditions.”

David Copland, director of mortgage services for LSL’s financial services division, added: “For several months now advisers from Pink, First Complete and TMA have reported greatly increased volumes of mortgage activity and now that’s coming through in the figures from the BBA and there is no reason to expect that these increasing volumes won’t continue for the rest of the year.

” What is significant however is that, despite an increase in gross lending, the net lending figures show that a large number of people are still paying down their debt. While the government schemes appear to be encouraging borrowers to the market, sustained low interest rates are enabling those on the property ladder to pay down their mortgages in a way that is just not usually possible with higher interest rates.”