Buyers who take out a mortgage to acquire properties are reclaiming their territory in the housing recovery, with applications 12% higher than levels seen a year ago, a report for Capital Economics shows.

Up until recently, the increase in home sales was due to demand from investors, with mortgage buyers only representing a slim percentage.

Additionally, the net percentage of banks that are loosening mortgage lending criteria grew to 7.8% in the past three months to April from 4.6% in the previous three months.

However, even with looser lending criteria, banks are still weary of lending to borrowers with anything less then healthy credit.