The latest Money and Credit figures from the Bank of England show that approvals for remortgaging with a different lender also declined by 900 in August, to 37,900

Mortgage approvals on house purchases dropped by 500 in August, to 64,700, bringing three straight months of growth to a stop.

The latest Money and Credit figures from the Bank of England show that approvals for remortgaging with a different lender also declined by 900 in August, to 37,900.

Net mortgage borrowing dropped by £0.2 billion to £4.3 billion in August, following a £0.9 billion decline to £4.5 billion in July.

The annual growth rate for net mortgage lending increased slightly, from 2.9% to 3.0% in August, although gross lending dropped to £22.7 billion, from £24.5 billion in July.

The average interest rate paid on newly drawn mortgages declined for the sixth straight month, to 4.26% in August from 4.28% in July. However, the rate on the outstanding stock of mortgages rose slightly from 3.88% to 3.89%.

Stephanie Daley, director of partnerships at Alexander Hall, said: While mortgage approvals have dipped slightly on a monthly basis this is almost certainly down to summer seasonality and the broader picture remains one of resilience, with activity consistently holding above the 60,000 threshold for well over a year.

This level of consistency highlights that underlying buyer demand is strong, and recent incentives, such as the decision to make the Mortgage Guarantee Scheme permanent and adjustments to loan-to-income caps, are helping to improve accessibility and affordability across the market, she said.

At the same time, major lenders have already started to respond with more flexible criteria, enabling more buyers to secure the finance they need. Looking ahead, the outlook for the remainder of the year remains positive, and we expect these supportive measures to underpin continued buyer activity, she added.

Jonathan Samuels, CEO of specialist lender Octane Capital, said: A marginal month on month dip in approval numbers suggests that buyer appetites remain robust, however, the challenge facing the market at present isn’t a lack of intent on the side of homebuyers, but this intent translating into action.

We’re simply not seeing buyers commit which has led to a surplus of stock and, as a result, sellers are finding transaction timelines increasingly lengthy and fraught with potential pitfalls, he said.

He added: This has driven an increase in fall-throughs, with many buyers and sellers seeing chains collapse at the eleventh hour. In these circumstances, we’ve seen a growing number of residential sellers turn to the specialist finance sector to secure bridging loans, helping them to protect their onward purchase and keep transactions on track.