Mortgage activity fell 12 per cent in August as fears of a double dip recession continue. The National Mortgage Index also reported the average loan size dropped over 7 per cent. Mortgage loan and remortgage loan applications also dropped last month, by 11 per cent and 15 per cent, respectively.

The summer lull is doing its job once again as August is seeing dropping figures left and right. This is a typical occurrence of the end to summer, and it couldn’t be happening at a worse time.

By region, the biggest change July to August took place in the North of England, as mortgage loan applications dropped off 24 per cent. Comparatively speaking, the North West experienced a 10 per cent rise in mortgage loan applications in August compared to July.

The average LTV (Loan to Value) saw only marginal changes from July to August, as LTV on mortgages dropped from 71.1 to 70.2 per cent. The average LTV on remortgages saw slightly different results, as they rose from 55.6 per cent to 56.9 per cent. Although, the average remortgage loan size dropped almost 7 per cent from July to August.

Regionally, when comparing the LTV from July to August on purchases, Wales saw the highest at 81.2 per cent and the South West the lowest, at 68 per cent.

The head of lending at Mortgage Advice Bureau, Brian Murphy, discussed the end of summer results and expectations in the near future, saying: "Although mortgage activity typically drops off in August due to the summer holiday period, the decline this year is certainly larger than we would expect on seasonal factors alone.

"We should have a much clearer picture as to how the mortgage market is likely to perform for the rest of the year once the coalition government announces its spending review next month, and many prospective buyers are likely to wait until the details of the review are published before they make a decision on whether to burden themselves with more debt."