Net mortgage borrowing hit £5.3bn in August, says the Bank of England.

This comes a month after it recorded a net repayment level of £1.4bn in July, which has only happened once before in the previous decade.

Gross lending rose from £16.6bn in July to £21.5bn in August, the data adds.

As well as this, house purchase approvals came to 74,500, down slightly from the 75,100 seen in July.

The BoE says this is the lowest number of approvals seen since July 2020 but is still above pre-February 2020 levels.

Remortgage approvals rose, however, from 37,400 in July to 39,700 in August – the highest level seen since March 2020, although “this remains low compared to the months running up to February 2020”.

Just Mortgages national operations director John Phillips says: “With just a few hours left in before stamp duty returns fully [at the time of writing], from now we will begin to get a clearer picture of the state of the housing market in the UK.

“And the outlook is bright. Despite a slight reduction in activity from the huge peaks earlier in the year, there are still plenty of people looking to move.

“The market is still characterised by an imbalance between buyers and sellers, with the former considerably out-weighing the latter, and this dynamic is unlikely to shift anytime soon.”

Phoebus Software sales and marketing director Richard Pike adds: “The inevitable slowdown in mortgage approvals is apparent in these latest figures but, in the greater scheme of things, the market is still looking fairly healthy.

“We are now heading into uncharted waters however, as furlough ends and we see for the first time the impact that will have on the labour market. We are seeing unprecedented levels of job vacancies that, should those currently on furlough find themselves out of work, could start to be filled. This would give a much needed boost especially to services industries.

“Nevertheless, as Bank of England governor Andrew Baily warned earlier this week, labour and supply shortages are pushing prices up and inflation, he says, is likely to go over the predicted 4%.

“This means interest rates are highly likely to increase before the end of the year.

“So, while lenders continue to offer historically low interest rates the housing market should keep going in its current vein. At least in the short term.”