The UK is seeing the last of its late-summer confidence ahead of Reeves’s Budget
The Bank of England’s latest Money and Credit figures show that September was still a fairly upbeat month for the housing market.
Net borrowing of mortgage debt rose to £5.5 billion, its highest level since March 2025, suggesting buyers were still keen to move despite higher living costs. Approvals for house purchases also edged up to 65,900, helped by mortgage rates settling.
The annual growth rate for net mortgage lending accelerated to 3.2% from 3% in August, marking its highest since January 2023. Gross lending rose to £24.9 billion from £23 billion, while repayments edged up slightly to £20.3 billion from £20 billion.
Net approvals for house purchases, which can be used as an indicator of future borrowing, rose modestly to 65,900 from 64,900 in August.
But while the data paints a positive picture of September, the mood in the market has since shifted, says Ian Futcher, Financial Planner at Quilter.
“With the Budget now fast approaching and rumours brewing about potential changes to housing taxes or stamp duty reliefs, many people are growing more cautious,” he said.
“Decisions about buying or selling a home are increasingly being put on hold until there is greater clarity on what the Chancellor will do. A small recent rise in mortgage rates has only reinforced that sense of hesitation.”
Away from housing, borrowing on credit slowed too. Net consumer credit fell to £1.5 billion from £1.7 billion in August, showing that households are choosing to be more careful with day-to-day spending.
At the same time people continued to build their financial buffers. Deposits increased by £7.9 billion in September, with most money being placed into interest-bearing accounts and ISAs that offer better returns on savings.
“Put together, these figures capture the last of the late-summer confidence before pre-Budget uncertainty set in,” Futcher said.
“Many people are now pressing pause on big decisions until they know whether upcoming policy changes will alter the costs of owning property or moving home.
“For households trying to plan, staying informed and waiting for full details before making major financial moves could prove wise in the weeks ahead.”
