Mortgage lenders approved significantly more mortgages than expected in August, the latest Bank of England data shows.

Mortgage approvals rose to 74,340 last month, up from 63,740 in July and the highest reading since January.

Anthony Codling, former City analyst and now chief executive of proptech firm Twindig, said: “Mortgage approvals leapt by 17% in August to 74,340, once again showing how robust the housing market has been without the interference of the government.

“However, the meddling of the mini-budget is likely to hit the housing market for six and knock it off course as lenders rush to pull mortgages [the lifeblood of the housing market] off the shelves.”

Jason Tebb, CEO at OnTheMarket.com, points out that net borrowing of mortgage debt by individuals picked up in August compared with the previous month and remains above the 12-month pre-pandemic average.

He said: “Approvals for house purchases, an indicator of future borrowing, increased sharply after a downwards trend over the previous several months.

“Our own figures show sentiment remained robust as 54 per cent of properties were Sold Subject to Contract within 30 days of being advertised for sale in August.

“The inevitable rebalancing of the housing market continued in August as more stock came to market. As we head into autumn, and housing affordability becomes more stretched for buyers, sellers will need advice from an experienced local agent more than ever before.”

The founding director of Revolution Brokers, Almas Uddin, commented: “Mortgage approvals have continued to climb skyward in recent months, despite mortgage rates increasing in line with numerous base rate hikes by the Bank of England.

“This has been spurred by a sense of urgency from the nation’s homebuyers, who are keen to secure what remain fairly reasonable rates in anticipation of further increases to come this year.

“With a number of lenders opting to cut their product range this week, we can expect to see the volume of mortgage approvals decline in the coming months, purely due to a reduction in consumer choice, particularly higher loan to value products.

“However, we don’t expect that this will cause buyer demand to evaporate completely and a robust level of market activity will remain.”

The latest mortgage approval figures are certainly positive and demonstrate the continued strength of the market in the face of an increasingly uncertain economic backdrop, according to the CEO of Octane Capital, Jonathan Samuels.

Samuels said: “[The latest mortgage data] don’t account for the recent turbulence seen within the sector as a result of inflationary pressures and a reduction in product choice, which is sure to dent the number of homebuyers opting to take the plunge in the coming months.”

Stuart Wilson, CEO at Air, added: “In the month since the last Bank of England update, a lot has changed for the UK economy, mortgage market and advisers. With interest rates at 2008 levels, energy prices capped to limit inflation and now a stamp duty cut from the Chancellor, we are looking at a very different economic landscape ahead.

“These August figures might be the last ‘business as usual’ data we see for a while. Mortgage borrowing has continued to remain above pre-pandemic averages, but approvals for new mortgages rose sharply and, with a new Stamp Duty cut coming into effect, it’s likely this will continue.

“While the current turmoil in the mortgage market will hit those on SVR or looking to purchase or remortgage, older borrowers on fixed incomes are likely to be particularly squeezed. Although they may have smaller mortgages than some younger borrowers, a disproportionate amount of their income will be used to cover the rapidly rising cost of food and utilities while affordability rules may mean that they are trapped on SVR. People who are concerned need to speak to their mortgage broker or a specialist adviser.

“As part of the advice process, good specialist advisers will take care to counsel customers on alternative ways of debt management, cost cutting and ways to handle their current financial challenges which may include considering whether the long-term fixed rate deals offered by RIOs and equity release may be an option. Providing someone with the surety that they know what they need to pay each month as well as the option to stop making payments if needs be should not be underestimated.