|
Mortgage borrowing in the UK rose to its highest level in six months in September, Bank of England data showed on Wednesday, as lower interest rates supported housing market activity. According to the Bank’s latest Money & Credit report, net borrowing of mortgage debt by individuals increased to £5.5 billion in September, up from £4.3 billion in August and the strongest monthly total since March 2025, when it reached £13.2 billion. The annual growth rate for net mortgage lending accelerated to 3.2% from 3.0% in August, marking its highest since January 2023. Gross lending rose to £24.9 billion from £23.0 billion, while repayments edged up slightly to £20.3 billion from £20.0 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 above the FXStreet-cited market consensus of 64,500 approvals for the month of September. Approvals for remortgaging with a different lender fell to 37,200 from 37,800. The effective interest rate on newly drawn mortgages declined by seven basis points to 4.19%, the lowest level since January 2023, extending a downward trend that began in March. The rate on outstanding mortgage stock was steady at 3.89%. Meanwhile, UK consumer borrowing declined during the month. Net consumer credit rose by £1.5 billion in September, down from £1.7 billion in August. Within that, credit card borrowing was little changed at £700 million, while other forms of consumer credit such as personal loans and car finance fell to £800 million from £1.0 billion. The annual growth rate for all consumer credit ticked higher to 7.3% from 7.2%. Credit card borrowing growth accelerated slightly to 11%, while other unsecured lending eased to 5.7%. UK households continued to increase their savings. Deposits with banks and building societies rose by £7.9 billion in September, driven by £5.8 billion of inflows into interest-bearing sight accounts and £2.4 billion into ISAs. Companies also built up cash reserves, depositing a net £8.7 billion with banks and building societies during September, following net withdrawals of £2.8 billion in August. In aggregate, the net flow of sterling money, known as M4ex, rose to £13.7 billion in September from £11.2 billion in August, driven by households’ higher deposits. Copyright 2025 Alliance News Ltd. All Rights Reserved.
|
