UK mortgage lenders approved nearly 66,000 home loans in September, the highest level since December 2024, according to new Bank of England figures.
The Bank’s latest Money and Credit report showed 65,900 mortgage approvals for property purchases — up by 1,000 from August — while approvals for remortgaging with a different lender slipped by 600 to 37,200.
Net mortgage borrowing rose sharply to £5.5bn, up from £4.3bn the previous month, marking the strongest rise since March, when borrowing hit £13.2bn. The annual growth rate for mortgage lending also edged up to 3.2% from 3%, its highest in almost three years.
The figures suggest renewed activity in the housing market after months of subdued demand, as falling inflation and expectations of future rate cuts begin to lift buyer confidence.
Industry reaction:
Emily Williams, director of research at Savills: “The lending data from the Bank of England is encouraging for the mainstream housing market in the run up to the Budget. Despite the uncertainty caused by rumours of changes to property taxation since August, Q3 saw the highest level of mortgage approvals for house purchases so far this year and was also 2% higher than the same period last year.
“Activity has been supported by the continued gradual eased in the cost of debt, with average rates for newly agreed loans at their lowest rate since early 2023. This pattern should continue into 2026, with markets expecting another cut to the base rate in the coming months. Much will also depend on how financial markets respond to the Chancellor’s Budget at the end of November. However, we expect any announcements to have a more pronounced impact on prime values and transactions than on the broader mainstream market.
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%.”
Simon Gammon, managing partner, Knight Frank Finance: “Mortgage approvals edged down slightly in September, but the overall picture remains one of stability, with monthly moves of fewer than 1,000 since June. We expect a more noticeable slowdown next month as the November Budget approaches and speculation builds around possible increases in personal and property taxation. Households tend to adopt a “wait and see” approach when they lack clarity on future outgoings.
“At the same time, four lenders reduced mortgage rates last week following positive inflation data, underlining how keen they are to stimulate activity in what remains a subdued market.
“What happens beyond November is less clear. Much will depend on whether the government opts for a broad-based reform of property taxation. There is a clear opportunity to support both housing market activity and economic growth by reducing transaction costs.”
Richard Merrett, managing director of Alexander Hall: “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.”
Read the orginal article: https://propertyindustryeye.com/uk-mortgage-approvals-hit-nine-month-high-bank-of-england-says/
