House purchase approvals drop to 53,400 — their lowest since December 2023
UK mortgage approvals for house purchases fell for a third consecutive month in September, dropping to 53,400 from 54,800 in August, according to the Bank of England’s latest Money and Credit statistical release.
The data, which lands the day after the Autumn Budget, sits below the previous six-month average of around 58,800 and marks the lowest monthly reading since December 2023, when just under 52,577 purchase deals were approved.
Approvals for remortgaging surged to 42,600 in September, up from 34,000 in August, a jump of around 25%.
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Meanwhile, net mortgage borrowing fell to £3.9 billion from £4.2 billion in August, remaining below the six-month average of £4.9 billion. Secured gross lending edged up to £24.2 billion from £23.7 billion but stayed below the six-month average of £26.3 billion and 2% below the level recorded in September 2025.
Borrowing also became more expensive. The effective interest rate on newly drawn mortgages rose to 4.63% from 4.60% in August, while the rate on the outstanding stock of mortgages ticked up to 4.03% from 4.00%.
A market struggling to gain traction
Industry figures said the September numbers confirmed a market that has been losing momentum throughout the year. Richard Pike, chief sales and marketing officer at Phoebus Software, said the latest decline was consistent with a broader pattern of underperformance.
“Mortgage approvals have been losing momentum throughout 2026, so a further decline in September reinforces this is a market struggling to gain traction,” he said. “It has been a challenging year so far for the mortgage market, with approvals year-to-date around 8% down on the same period last year. People are still moving home, but against a backdrop of economic uncertainty and continued affordability pressures, buyers are being cautious about committing to a purchase.”
John Phillips, chief executive of Just Mortgages and Spicerhaart, said the slowdown reflected the difficult conditions buyers, sellers and lenders were navigating.
“A slowdown in approvals in September really typifies the challenges facing the market, as buyers, sellers and lenders respond to what the Chancellor described yesterday as ‘global economic storms’,” he said.
What rising rates mean for borrowers
Mark Harris, chief executive of mortgage broker SPF Private Clients, said lenders were pulling in opposite directions on pricing, even as the broader rate trend pointed upward.
“The effective interest rate paid on new mortgages jumped again to 4.63% while the rate on the outstanding stock of mortgages edged up to 4.03%,” he said. “On the ground, the pricing picture is mixed, with some lenders increasing rates while others have been trimming them to attract business. Increased expectations of a base rate rise at the November meeting of the Monetary Policy Committee will do nothing to improve affordability for those on variable-rate mortgages.”
Harris urged borrowers facing upcoming renewals to act quickly. “Borrowers who need a mortgage in coming months should consider locking into a product as soon as they can to protect themselves from potential rate rises in the short term.”
He added that the surge in remortgage approvals underlined the importance of shopping around. “Remortgaging numbers rose significantly, suggesting that borrowers are shopping around for better deals as mortgage rates continue to rise. It is always worth checking what is available on the market via a whole-of-market broker, rather than assuming your lender is offering the best option.”
Can the Your First Home scheme turn the tide?
Wednesday’s Autumn Budget confirmed that the Your First Home equity loan scheme will launch in April 2027, offering first-time buyers government-backed equity loans to support low-deposit purchases of new-build homes. While the announcement came too late to lift September’s figures, professionals said it could shift sentiment in the months ahead.
Harris said: “It is hoped that the Your First Home scheme which is coming in the spring will give the housing market some welcome stimulus and encourage would-be first-time buyers — who are so important to the overall health of the market — to get on the ladder.”
Pike, however, cautioned that any recovery would be gradual. “The Government’s new Your First Home scheme should help encourage more first-time buyers into the market once launched, but it will take time for this to feed through into activity. Until buyers feel more confident about the cost of borrowing and their wider financial position, it is difficult to see a sustained recovery in the housing market.”
Phillips added that advisers should not wait for conditions to improve before stepping up their efforts. “As we head towards the end of the year, brokers will need to stay proactive and remain visible, using all the tools at their disposal to give clients confidence and help them navigate this changing market.”
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