Net borrowing of mortgage debt by individuals decreased to £4.3bn in October, down from £5.2bn in September, according to the latest Bank of England figures.
Gross lending edged slightly lower to £24.5bn, while gross repayments rose to £22.1bn, contributing to the monthly decline.
The annual growth rate for net mortgage lending remained unchanged at 3.2%, its highest level since January 2023.
Mortgage approvals also fell during the month. Net approvals for house purchase declined by 600 to 65,000, signalling softer future borrowing activity.
Approvals for remortgaging dropped more sharply, falling by 3,600 to 33,100, the lowest figure since February 2025.
The effective interest rate on newly drawn mortgages eased to 4.17% in October, down from 4.19% in September, marking the lowest level since January 2023.
The rate on the outstanding stock of mortgages remained stable at 3.89% for the third month in a row.
Net borrowing of consumer credit decreased for the second consecutive month, falling to £1.1bn in October from £1.4bn in September.
Within this, net borrowing on credit cards edged down to £0.6bn, while other forms of consumer credit fell to £0.5bn.
Reaction
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“With mortgage approvals dipping slightly in October, the underlying resilience of the housing market is in evidence despite many challenges facing it.
“The effective interest rate paid on new mortgages fell to 4.17% in October and since then, we have seen some lenders trim their mortgage rates further. However, with the rate on the outstanding stock of mortgages unchanged at 3.89%, affordability remains a concern for many.
“The good news for borrowers is that lenders are keen to lend and have the funds available to do so. Many of the big lenders have reduced their mortgage rates in recent days as they look to pick up more business before the year end.
“Remortgaging numbers fell, suggesting that borrowers may be sticking with their existing lender and refinancing rather than going through the hassle of another mortgage application with a new lender.”
Tomer Aboody, director of specialist lender MT Finance:
“Lower mortgage approvals further point to little confidence in the Government, a sentiment which was reinforced in the Budget with its lack of help for mortgage borrowers or households.
“At a time when confidence and stability is needed, further taxes affecting buy-to-let landlords will not help the market. We await to see whether we will have a change in Chancellor soon, which could give the market a much-needed positive boost.”
Nathan Emerson, CEO of Propertymark:
“Speculation surrounding the Autumn Budget may have played a role in contributing towards a decrease in the number of mortgage approvals during this period.
“While it is understandable to see a lull regarding mortgage activity on the months leading up to the Chancellor making their fiscal plans known, it is now time to concentrate on ensuring the housing market is fully empowered for already anticipated population growth, via assembling a skilled workforce and supply chain to deliver on housing targets across each nation in what is already demand timeframe to achieve.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“Mortgage approvals provide the best evidence of likely market activity over the next few months, and it’s clear from these figures that speculation about the Chancellor’s Budget took its toll.
“On the ground, we are seeing plenty of resilience and a determination to keep transactions running even though they are becoming more protracted and often subject to some tough renegotiating. Affordability is gradually improving, especially as another, earlier base rate cut is more likely.
“We have often found in similar circumstances that the bigger the pause, the larger the re-set. As a result, we are expecting a rebound over the next few weeks and a more sustained recovery in early 2026 based on what buyers and sellers have been telling us recently.”
Jason Tebb, President of OnTheMarket, comments on Bank of England Money & Credit:
“Intense speculation surrounding the Budget and what it might have in store for the housing market had an impact on approvals for house purchases – an indicator of future borrowing.
“However, approvals decreased only slightly in October, demonstrating resilience and determination on the whole from buyers and sellers to proceed with their moves.
“With the rate on newly-drawn mortgages falling again for the eighth consecutive month, affordability challenges continue to ease.
“Although the Bank of England held base rate in November, this stability, following five base rate cuts over the previous 16 months, is boosting confidence.
“With another base rate cut expected, perhaps even this month, and with lenders trimming their mortgage pricing as they try to drum up more business before the end of the year, there is further good news for borrowers.”
Paul Matthews, senior director of risk at independent consultancy Broadstone:
“Mortgage lending declined in October which reflects sagging consumer confidence in the run up to the Budget amid a raft of rumours around potential tax-raising measures.
“Markets firmly expect another rate cut from the Bank of England in December which would take the rate below 4% and could boost affordability for home buyers as we approach the end of the year. The worst is also likely to behind us in terms of further tax-raising measures which should provide forward stability for financial planning.
“Nonetheless, we are not expecting a significant reduction in rates to pre-pandemic levels and budget pressures remain tight for millions of households so lenders will still need to exercise caution around affordability.”
