Analyst expects gradual rather than sharp slow down in housing market
Mortgage providers approved 74,453 home loans, down from 75,100 in July.
The drop comes after the government’s stamp duty holiday was scaled back.
While August saw a small rebound in borrowing compared to July, the £5.3bn borrowed is 20% lower than the average for the past 12-months.
“Approvals for house purchases, which are the figures that give us an insight into what future months look like, show a slight reduction on the past year but are still above pre-pandemic levels,” says Laura Suter, head of personal finance at AJ Bell.
“Rather than seeing a total drop off a cliff, as many have feared, it’s likely that the housing market will just gradually slow down as the final end of the stamp duty holiday arrives and many of the people who wanted to move in the race for space will have done so.”
“The nation’s frugal lockdown saving ways have not been dented by being able to go out and spend more, with us all saving £9.1bn in August – almost double the usual savings amount we saw pre-pandemic. However, savers were rewarded with yet another drop in savings rates to yet another historic low.”
With no signs of the Bank of England raising rates and inflation being high, and poised to shift even higher in the coming months, diligent savers are being clobbered from both sides.
“A mini rates war in some corners of the savings market has improved the best buy rates, meaning there are some options out there for those willing to shop around. And anything is better than leaving it dwindling in your current account earning 0.01% interest – at that rate you’d need £100,000 in savings just to get £10 back each year in interest,” says Suter.
Borrowing on credit cards, personal loans and car finance rose slightly but is still about a third of what it was in pre-pandemic times.