UK mortgage approvals tick higher in September, borrowing hits six-month high
By Michele Maatouk
Date: Wednesday 29 Oct 2025
(Sharecast News) - UK mortgage approvals unexpectedly ticked higher in September and borrowing hit a six-month high, according to data released on Wednesday by the Bank of England.
According to the latest monthly Money and Credit Report, net mortgage approvals rose by 1,000 to 65,900 in September. Analysts were expecting a decline.
Net borrowing of mortgage debt by individuals rose by £1.2bn to £5.5 bn - the highest since March 2025.
The effective interest rate - the actual interest paid - on newly-drawn mortgages fell by seven basis points to 4.19% in September, which was the lowest since January 2023, continuing the downward trend seen since March 2025.
The report also showed that net borrowing of consumer credit was £1.5bn last month, down from £1.7bn in August.
Within that, net borrowing through credit cards was little changed at £0.7bn, while net borrowing through other forms of consumer credit fell to £0.8bn from £1bn over the same period.
Households' deposits with banks and building societies increased by £7.9bn in September, driven by households depositing an additional £5.8bn into interest-bearing sight deposit accounts, £2.4bn into ISAs, and £0.7bn into non-interest-bearing accounts.
Richard Merrett, managing director of mortgage broker Alexander Hall, said: "A renewed strengthening in mortgage approvals reinforces the positive market sentiment and consistency that we've seen across the mortgage sector throughout 2025. Despite broader economic uncertainty, borrowers continue to show confidence, supported by more accessible mortgage products and steady lender appetite.
"There is, of course, a chance that we could see mortgage market activity reduce in the short term as the Autumn Budget approaches, with some homebuyers taking a brief pause to see what the Government has up its sleeve.
"However, any hesitation will be temporary and, with inflation now holding steady at 3.8% for the third month running, there's growing optimism that a base rate cut could still arrive before Christmas. If so, it would help fuel renewed momentum and set the stage for a strong start to 2026."
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