Mortgage approvals for house purchases fell to their lowest level since December 2023 in September 2026, according to Bank of England figures published on 29 October, as the effective rate on newly drawn mortgages rose to 4.63%.
Lenders approved 53,443 house-purchase mortgages in September, down from 54,814 in August. The figures point to weaker activity in the housing finance market, although they do not measure completed property sales.
Mortgage approvals fall for third consecutive month
The Bank of England reported 53,443 approvals for house purchases in September 2026, compared with 54,814 in August. The September reading was the lowest since December 2023. Mortgage approvals are a forward-looking indicator of lending activity, not a count of completed house sales.
Borrowing costs continue to rise
The effective interest rate on newly drawn mortgages increased to 4.63% in September from 4.60% in August. The average rate on the outstanding stock of mortgages rose to 4.03% from 4.00%. Higher rates can increase repayments for new borrowers and those refinancing existing loans.
Remortgaging approvals rise
Approvals for remortgaging with a different lender rose to approximately 42,600 in September from 34,000 in August. These figures do not include all product transfers made with the same lender, and do not establish borrowers’ individual reasons for refinancing.
Net mortgage lending slows
Net mortgage borrowing fell to approximately £3.9 billion in September, from £4.2 billion in August, below the recent six-month average of £4.9 billion. Gross lending rose slightly to £24.2 billion from £23.7 billion, while repayments also increased.
Consumer credit growth accelerates
Annual consumer-credit growth reached 9.8%, its fastest rate since April 2018, even as the monthly flow of net consumer-credit borrowing declined to approximately £1.9 billion from £2.7 billion in August. The annual growth rate and monthly borrowing flow measure different things.
Housing affordability and the Budget
The figures cover September, before the Chancellor delivered the Autumn Budget on 28 October, and therefore cannot establish any effect from that Budget. Mortgage pricing reflects a range of influences including market funding costs, expectations for Bank Rate and lenders’ decisions.
What happens next?
Future Bank of England releases will show whether the decline in approvals continues. The Monetary Policy Committee will determine future Bank Rate decisions; no future rate increase is certain.