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The coming months could see an increase in demand for rental homes as the Bank of England reports a drop in mortgage approvals.

According to the organisation, the mortgage market remained weak in May in comparison to before the Covid-19 pandemic.

On net, households borrowed an additional £1.2 billion secured on their homes: this was slightly higher than the £0.0 billion in April but weak compared to an average of £4.1 billion in the six months to February 2020.

The increase on the month reflected more new borrowing by households, rather than lower repayments.

In contrast to the increase in mortgage borrowing, approvals – a more forward looking indicator – fell back further, pointing to continued mortgage market weakness.

The number of mortgage approvals for house purchase fell to a new series low in May, of 9,300.

This was, almost 90 per cent below the February level and around a third of their trough during the financial crisis in 2008.

Approvals for remortgage (which include remortgaging with a different lender only) have also fallen, to 30,400; this fall was a little less sharp and they are 42 per cent lower than in February.

Some brokers, however, are reporting increased interest in buy-to-let borrowing, also suggesting an expected growth in demand for private rental property later in the year.