Mortgage approvals fell last month as uncertainty hit one of the key indicators in the property market.

There was only a marginal fall of 500 to 64,700, but it followed a leap of 800 in July.

And remortgages decreased by 900 in August, to 37,900. Net mortgage borrowing decreased by £0.2 billion to £4.3 billion, according to the latest Bank of England money and credit release.

Listings down

News of the mortgage fall, which could be affected by seasonal holiday factors, follows evidence last week that listings are down and withdrawals are up.

After speculation about property taxes in the Budget began in August, there were 6.1% fewer new property listings than in the first half of the month, and this affected most price bands.

And there was also a 23% rise in properties being withdrawn from the market without a sale, according to research by AI specialist data firm PriceHubble.

Rumours

Speculation about what Chancellor Rachel Reeves will do in the Budget on 26 November, includes whether Stamp Duty could be replaced with a seller’s tax on properties over £500,000.

It is also rumoured that National Insurance could be added to landlords’ incomes, and a Mansion Tax could be imposed on houses over £1.5 million.

Industry reaction

The portal

Jason Tebb, President at OnTheMarket

“Despite August being a traditionally quieter time of the year for the housing market, and in face of wider political and economic concerns, there was remarkable resilience with approvals for house purchases – an indicator of future borrowing – dipping only slightly on the previous month.

“With the rate on newly-drawn mortgages falling again for the sixth consecutive month, affordability challenges continue to ease. Five base rate reductions from the Bank of England in the past year have helped, along with recently relaxed lending rules, enabling many buyers to boost their borrowing.”

The agent

Simon Gammon, Managing Partner at Knight Frank Finance

“The mortgage market remains remarkably steady. Net approvals for house purchases have moved by fewer than 1,000 month-on-month for the past three months, with August’s figure dipping only slightly to 64,700. Lending rates have also held firm since the last Bank of England decision, reinforcing a broader picture of stability – activity is consistent, and borrowers have largely adjusted to the current rate environment,” he says.

“That said, at the top end we’re beginning to see a touch of hesitation ahead of the Budget. Some high-value buyers are choosing to wait for greater clarity around potential tax changes before completing transactions, which could make the coming months quieter for those discretionary purchases.”

The industry leader

Nathan Emerson, CEO at Propertymark

“Continued economic uncertainty and a traditionally quieter period during the summer holidays, alongside anxiety over the UK Government’s upcoming budget and decisions being made on interest rates, have perhaps contributed towards this decrease in mortgage approvals.

“However, the Bank of England’s recent freeze on interest rates will contribute to future confidence and stability in the mortgage market now that people on variable mortgages and those looking to finance their next home move have additional reassurance of static rates for now. We now look to November, which is when the next interest rate decision will be made,” he says.

“It is important that consumers monitor upcoming mortgage deals, as they can vary significantly given current economic circumstances.”