The Bank of England has revealed that individuals borrowed £5.3 billion of net mortgage debt 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. Gross repayments fell a little to £17.6 billion.
Approvals for house purchases, an indicator of future borrowing, ticked down in August to 74,500 from 75,100 in July. This is the lowest since July 2020, but remains above pre-February 2020 levels.
Approvals for remortgaging (which only capture 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.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “The end of the first threshold for the Stamp Duty holiday and the usual summer holiday lull have led to a further dip in activity in August. Despite this, approvals for house purchases remained above pre-pandemic levels, showing the underlying strength of the market.
“With the end to the final part of the Stamp Duty holiday coming up tomorrow, we’d expect to see an increase in activity in September but it’s unlikely to be the same surge that we saw in June. And the upcoming Autumn Budget could be a good time for a change in the Stamp Duty thresholds, to ease the financial burden for the average homebuyer.
“Despite the dip in activity, there are still plenty of opportunities for brokers. With a particularly high number of maturities expected over the coming months, brokers can really add value for their clients by helping them to take advantage of the range of low rates and attractive deals available.”