It was the second consecutive month in which house purchase approvals declined and since the start of June, monthly house purchase approvals have fallen 5.4%.
Richard Sexton, director of e.surv chartered surveyors, said the dip in activity was down to seasonal stagnation rather than a sign of a more permanent decline.
“The new MMR regulations have been fully absorbed into the mortgage application process, the backlog of applications they temporarily caused has all been cleared away, and now the mortgage market is in full health moving forwards.
“As the seasons change and we move into autumn, we are already anticipating that mortgage approvals will bounce back upwards.
“Lenders are signalling a desire to pump up lending volume towards the tail end of the year, and there is still a whole host of buyers desperate to get onto the housing ladder, particularly at the bottom of the market.”
Lending figures released by the Bank of England this week showed the pace of gross lending had yet to be curtailed by any regulatory changes. In Q2, lending rose by 9% quarter-on-quarter to £51.5bn, the highest amount advanced in a second quarter since 2008.
In his analysis of the market written for Mortgage Solutions, Lloyd Davies of the Conveyancing Association, said that the market had not felt the weight of regulatory pressure in its completions because the mortgage process typically took between eight and 12 weeks.
But he did not share Sexton’s optimism that the August decline was a summer holiday blip.
Davies said new property conveyancing instructions had been in decline over the last three months by around 10 to 13% which he said was due to a combination of regulation, the fear of a rate rise and seasonal factors.
