August's 71,030 approvals beat July's total (68,764) and the average of 65,594 over the previous six months.
The number of approvals for remortgaging also rose, reaching 40,931 compared to 38,042 the previous month and the average of 35,811 over the previous six months.
Additionally, the report shows that net mortgage lending increased by £3.4 billion in August, beating July's £2.7 billion and the average monthly increase of £2.4 billion over the previous six months.
Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented: “There were no signs of a summer slowdown in the mortgage market in August, with the monthly increase in lending £1 billion higher than the average for the previous six months. The remortgage market in particular has experienced a burst of activity, with approvals for remortgage rising more than twice as fast as those for house purchase year-on-year. August also marks the highest number of remortgage approvals since the series began in 2013.
Falling mortgage rates mean both new buyers and existing homeowners stand to make significant savings by locking into one of the current deals on the market. This time of year often sees an influx of competitively priced products as lenders adjust their offering based on end-of-year targets, so it’s likely borrowers will continue to benefit from affordable rates. However, with a base rate rise expected in 2016, borrowers would do well to make the most of current pricing while it’s still around.
The short-term outlook for borrowers is largely positive: wage growth has returned, mortgage lenders are actively competing for business and house price growth has slowed to a more modest rate compared to last year. However, the housing shortage threatens to derail affordability in the long-term. The falling number of house building starts must be corrected to prevent growing numbers from being priced out of homeownership.”
Adrian Gill, director of Your Move and Reeds Rains estate agents, comments: “Mortgage demand has been feeling the wind in its sails over the summer months, and loan approvals in August have cruised past previous monthly benchmarks to reach a 2015 high.
The mortgage market has certainly cast off the anchor of regulatory changes, and it’s not just first-time buyers who are benefiting from these calmer waters. Remortgaging activity has been making considerable headway recently, as existing homeowners shore up their finances before the wind changes, and secure the best possible deals before an interest rate rise. In the purchase market, buoyant demand is being met with a dried up pool of available homes, and this imbalance will propel property prices on throughout the autumn.”
Peter Rollings, CEO of Marsh & Parsons, added: “The mercury in the mortgage market is rising, with August marking the third consecutive month-on-month increase in house purchase loan approvals. And it’s not just new buyers who are feeling confident in the current conditions. Remortgaging has also been a hot ticket over the summer months, as an interest rate rise continues to be postponed into 2016 and homeowners capitalise on cheaper borrowing rates while they can."
