Home buyer mortgage demand expected by lenders to soften over summer months
But demand is expected to decrease over the three months to the end of August.
Re-mortgaging demand also increased in the past few months and was expected to increase in the next few months.
The Bank of England's Credit Conditions Survey is carried out each quarter, as part of its role in maintaining financial stability.
The report reflects the overall views of the banks and building societies surveyed, and does not necessarily reflect the Bank of England's own views.
Lenders were surveyed between May 27 and June 13 for the latest report.
They were asked to report changes in the three months to the end of May, relative to the period between December and February, and expected changes in the three months to August.
Any impact from more recent developments is not captured in the survey.
Home buying costs became more expensive for some buyers from April, as stamp duty discounts became less generous. Stamp duty applies in England and Northern Ireland.
Recent HM Revenue and Customs (HMRC) figures have shown that house sales picked up in May, following a plunge in April as the stamp duty holiday ended.
Lenders were surveyed between May 27 and June 13 for the latest report (Lauren Hurley/PA)
HMRC's report said sales were likely brought forward into March to take advantage of the higher stamp duty thresholds.
Simon Gammon, managing partner, Knight Frank Finance, said: 'Lenders expect demand for home purchase mortgages to soften through the summer – a seasonal trend, but also a reflection of where mortgage rates were when the survey was taken in late May and early June.
'At that point, the best fixed-rate pricing had plateaued just below 4%, and with swap rates edging higher due to hotter-than-expected inflation data, there appeared little scope for further easing.
'That picture has shifted. We're now seeing signs of a weakening labour market, and the Bank of England's tone has changed – there's more focus on downside risks to growth than inflation.'
He said that had helped to drive mortgage rate cuts by major lenders over the past 10 days 'often by as much as 0.2 percentage points'.
Mr Gammon added: 'While further reductions will be marginal, this could support mortgage activity over the summer and tee up a much busier autumn.
'The remortgaging market remains more robust.'
The Bank of England report also said that mortgage availability is expected to increase over the three months to end of August.
The availability of non-mortgage credit to households is also expected to increase.
Lenders reported that the length of interest-free periods on credit cards for balance transfers and for purchases both increased in the past three months, and were expected to be unchanged in the next few months.
Demand for corporate lending from small and medium-sized businesses had slightly increased in the past few months, while demand from big firms had been unchanged.
Banks and building societies said demand for corporate lending in the next three months was expected to increase slightly for small and big business, but was expected to be unchanged for medium-sized businesses.
Lenders reported that default rates on mortgage loans to households were unchanged in the past few months, and were expected to remain unchanged in the next few months.
Defaults for credit cards and other household loans were also expected to be unchanged in the next few months.
Lenders said default rates on loans to businesses were unchanged for small, medium and large businesses in the past few months and were expected to remain unchanged in the next few months.
Overall credit availability to the corporate sector is expected to slightly increase in the next few months.
Karim Haji, global and UK head of financial services at KPMG, said households are adjusting to 'ongoing cost pressures'.
He said the stability in default rates 'reflects a degree of resilience'.
Mr Haji added: 'As we move into the second half of the year, cautious optimism is warranted but lenders must remain alert to changes in affordability and borrower behaviour.'
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