The figures are the first set released by the Bank since it made the decision to drop the Base Rate to 0.25%.
The figures found the value of mortgage approvals fell to £17.7bn, down from £18.6bn in July and £19.2bn in June.
The value of house purchases dropped from £11.5bn in May to £10.4bn in August, with a decline of 6,392 in the number of housing purchases for the period.
Gross lending continued to grow in August to £19.8bn, but the growth of £2.9bn was down compared to the average of £3.3bn over the previous six months. The three-month annualised and twelve-month growth rates for gross mortgage lending stood at 2.8% and 3.2% respectively.
Andrew McPhillips, chief economist at Yorkshire Building Society, said: “The fact that mortgage lending is continuing to grow despite decreasing mortgage approvals shows that lending is being driven by growth in house prices rather than transactions.”
As the market continues to find its feet after an uncertain summer, there is a call for first-time buyers to be reassured of the market’s strength.
Daniel Hegarty, CEO and founder of Habito, said: “It feels like Groundhog Day as mortgage approval rates are sinking again. People may debate it’s the upshot of Brexit, but we can’t keep blaming the vote. While it’s not all bad news as lending is increasing in other areas, for first-time buyers, and those looking to remortgage there is still fear at work in the market.”