"We are now heading into uncharted waters however, as furlough ends and we see for the first time the impact that will have on the labour market."
This is the lowest since July 2020, but remains above pre-February 2020 levels.
Approvals for remortgaging with a different lender rose to 39,700 in August. This remains low compared to the months running up to February 2020, but is the highest since March 2020.
Individuals borrowed £5.3 billion of mortgage debt, on net, in August. This follows a rare net repayment of £1.8 billion in July. The net borrowing in August was £1.4 billion below the 12 month average to June 2021, when the full stamp duty holiday was in effect.
Gross lending bounced back to £21.5 billion in August, from £16.6 billion in July.
Richard Pike, sales and marketing director at Phoebus Software, said: “The inevitable slow down in mortgage approvals is apparent in these latest figures but, in the greater scheme of things, the market is still looking fairly healthy. We are now heading into uncharted waters however, as furlough ends and we see for the first time the impact that will have on the labour market. We are seeing unprecedented levels of job vacancies that, should those currently on furlough find themselves out of work, could start to be filled. This would give a much needed boost especially to services industries.
“Nevertheless, as Bank of England Governor Andrew Baily warned earlier this week, labour and supply shortages are pushing prices up and inflation, he says, is likely to go over the predicted 4%. This means interest rates are highly likely to increase before the end of the year. So, while lenders continue to offer historically low interest rates the housing market should keep going in its current vein. At least in the short term.”
Tomer Aboody, director of MT Finance, commented: "Although mortgage approvals were slightly down in August, they are still above pre-pandemic times. The strength of the market further demonstrates buyer confidence, as well as a desire to take advantage of the low interest rate environment. This is further demonstrated by the remortgage market, where borrowers are keen to switch to a cheap fixed-rate mortgage and make the most of lenders' appetite to lend.
"The upwards trajectory of the market is set to continue for the foreseeable future while borrowing remains cheap, even though the stamp duty holiday is about to end."
