The latest Money and Credit data revealed net borrowing during the usually quiet month was £3.1 billion – similar to July when it stood at £2.9 billion but lower than the pre-Covid levels in February of £23.7 billion.

However, the BoE also revealed mortgage approvals for house purchases increased ‘sharply’ during August rising from 66,300 in July to 84,700.

While this was the highest number of approvals since October 2007, according to the BoE, it provided only small compensation for the huge weakness experienced between March and June.

The BoE revealed there had been, in total, 418,000 approvals in 2020 compared to 524,000 in the same period in 2019.

When it came to remortgaging data – which looked at customers who remortgaged to a new lender – there was little change compared to July but figures were 36% lower than in February.

Market rebound

Rob Barnard, director of intermediaries at Masthaven said:  “Today’s figures show that the housing market has rebounded from the lows of April and May in a way that no-one predicted.

“A surge in buyer demand combined with the impact of the Stamp Duty holiday has provided a welcome boost to the industry as homebuyers look to take advantage of the government initiative.

“The mortgage and short-term lending sectors have proven to be remarkably resilient in the face of unprecedented circumstances, adapting to new ways of working and ensuring they remain open for business.”

Meanwhile, Paul Stockwell, chief commercial officer of Gatehouse Bank, said the figures also pointed towards the short-term being equally as buoyant.

“Lending approvals, coming early in the conveyancing process, are one of the leading indicators of market activity so August’s figures suggest a strong autumn to come,” he said.

Managing the demand

However, while the statistics offered cause for optimism for many, others were more cautious – particularly with concerns around unemployment.

Matthew Fleming-Duffy, director of independent mortgage broker Cherry Mortgage & Finance, was concerned about how firms would cope with the unleashing of pent-up demand.

“Mortgage industry stakeholders – from banks and building societies to solicitors and surveyors – still have furloughed staff and are operating under safe working conditions,” he explained.

“In other words, while caseloads are higher, lenders’ capacity to function is currently subdued.

“Product choice is still limited, particularly at higher LTVs. There are only a handful of mortgage lenders offering products at 90% LTV, with some singling out first-time buyers for exclusive eligibility and others only providing guarantor loans.

“It’s very difficult predicting what the market will look like next year, as the furlough scheme and Stamp Duty holiday come to an end, and we will be living in a post-Brexit Britain.”