Net borrowing of mortgage debt by individuals rose to £5.5bn in September, up £1.2bn from August and marking the highest level since March 2025 (£13.2 bn), according to the Bank of England’s (BoE’s) latest Money and Credit report.
Net mortgage approvals for house purchase also increased slightly, rising by 1,000 to 65,900 during the month.
However, remortgage approvals dipped by 600 to 37,200, reflecting a slowdown in refinancing activity.
Consumer credit growth eased, with net borrowing falling to £1.5bn in September from £1.7bn in August.
Within this, credit card borrowing remained stable at £0.7bn, while other forms of consumer credit – such as personal loans and car finance – fell to £0.8bn from £1.0bn.
Private non-financial corporations (PNFCs) raised a modest £0.2bn of finance in September, a sharp drop from £6.2bn in net borrowing the previous month.
The net flow of sterling money (M4ex) rose to £13.7bn, compared with £11.2bn in August.
This was largely driven by households increasing their holdings of money by £7.9bn – including £5.8bn in interest-bearing sight deposits, £2.4bn into ISAs, and £0.7bn into non-interest-bearing accounts.
Meanwhile, sterling net lending to private sector companies and households (M4Lex) reached £19.5bn in September, almost doubling from £10.2bn in August.
The increase was driven by net lending flows of £11.1bn to non-intermediate other financial corporations (NIOFCs), £5.3bn to households, and £3.1bn to PNFCs.
Reaction:
Nathan Emerson, CEO of Propertymark:
“An uplift in the number of mortgage approvals is encouraging to witness. Many cogs need to turn harmoniously together when it comes to consumer confidence and affordability, and despite challenges within the wider economy, it is positive to see people being able to take their next step onto the housing ladder with greater ease.
“There are still concerns which need to be acknowledged, however, such as inflation sitting close to double what the Bank of England have targeted and the influence this can have regarding base rate decisions. Despite this, we remain in a much stronger position than we started the year at, when the base rate stood much higher at 4.75%.”
Colin Bell, Founder and COO of Perenna:
“Another rise in approvals is generally seen a positive for buyers, but it is ultimately masking the complete lack of movement and progress in the market. It has only been temporary measures that have previously caused an increase in lending of any significance, the last being the Stamp Duty holiday during the pandemic which drove affordability. Seasonality also makes small moves look larger than they really are. We need a far more stable and long-term solution for the market if we’re going to get people on the property ladder.
“With inflation remaining sticky, we cannot rely on people jumping on lower rates to buy when this is unlikely to happen any time soon. We are better off accepting that we are likely to remain in a higher rate environment at least in the medium term, and we need reform that reflects that, address issues with stress testing and create space for innovative solutions that provide borrowers with the long-term stability they crave and allows them to have much greater control over their financial lives.”
