In October, net mortgage approvals for house purchase decreased by 600 to 65,000, while approvals for remortgaging fell by 3,600 to 33,100, the lowest since February 2025 (32,900), according to Bank of England data published this morning.
Net borrowing of mortgage debt by individuals fell back to £4.3 billion in October, after a rise to £5.2 billion in September.
Additionally, net borrowing of consumer credit by individuals decreased for the second consecutive month, to £1.1 billion in October from £1.4 billion in September.
Within this, net borrowing through credit cards slightly decreased, to £0.6 billion from £0.7 billion. Net borrowing through other forms of consumer credit was £0.5 billion in October, down from £0.7 billion in September.
Brokers said the data was expected as it showed pre-Budget jitters.
Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial, said: “Rachel Reeves’ delayed Budget caused significant delays in the housing market. Mortgage approvals were down in October as homeowners waited to see what the Budget would have in store for the housing market.
“The market should spring back into life in December now clarity has been accomplished.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, agreed that the delayed Budget caused buyers to stall.
He added: “The remortgage figures are down around 10% on the previous month, as borrowers held out to see the effect of the Budget before making choices on future borrowing needs.
“With rates sliding throughout October there was also less urgency to secure deals, which potentially drove the bulk of this drop. Now we have clear focus on the property market post-Budget, borrowers will be keen to sure up their finances for 2026.”
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said: “Going going gone. That’s what happened to sentiment in the property market in the lead-up to the Budget.
“It’s no coincidence that approvals for house purchase dipped on the back of it. People were too busy battening down the hatches to be focused on bricks and mortar.”
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, expects the housing market to bounce back.
She continued: “This data sums up the pre-Budget nerves amid prospective homebuyers. With no end of headlines suggesting a grim fiscal event at the end of November, it’s no surprise people chose to sit on their hands.
“On a positive note, we may see a surge in activity in December as people seek to make up for the lost time.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, said the data shouldn’t be interpreted as good news.
He added: “The government and Bank of England may be tempted to interpret this as evidence that their policies are working. However, falling borrowing in a stagnating economy isn’t a sign of good health – it’s a warning.
“Consumers pull back when they feel they have no room left to stretch and, right now, that’s exactly what the data is telling us.”
Photo by Ussama Azam on Unsplash
