In its latest Money and Credit Report, the bank noted that approvals for remortgaging increased from 25,200 to 27,200 over the same period – the first rise in five months.
Customers borrowed £2.9bn in net mortgage debt in August, compared to £2.8bn in July.
Gross lending rose by £0.3bn to £19.9bn in August, while gross repayments increased by £1.3bn over the same period, to £18.4bn.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The rate cut didn’t spark immediate overnight drops in mortgage rates, in fact, the Bank of England figures show the average deal actually rose during the month. However, the fact the bank had started to cut rates at long last was enough to light the fire of hope in buyers.
“Since the cut, mortgage rates have inched down. At the end of last month, a two-year fix cost an average of 5.57%, according to Moneyfacts, whereas now it’s 5.4%. It’s not a huge move, but this steady decline is starting to add up. If you go back a year, it was 6.48%.”
Alice Haine, personal finance analyst at Bestinvest, added: “Improving mortgage rates and strong income growth have eased the affordability challenge for some buyers in recent months, with the Bank of England’s interest rate cut at the start of August and prospect of at least one more rate reduction to come this year energising the residential property market.
“This has not fully filtered through to the mortgage market just yet, as the effective rate on newly drawn mortgages rose by three basis points to 4.84% in August, highlighting that the financial pressures of the past few years have not eased entirely for borrowers.”
