UK Mortgage Approvals Reach September Peak as Budget Tax Concern Looms
Approvals rise to 65,900 in September despite expectations of property-tax measures in Chancellor Rachel Reeves’s autumn budget
In September 2025 British mortgage approvals hit approximately 65,900—the strongest monthly figure since December 2024—according to data from the Bank of England.
This uptick comes despite mounting speculation that Chancellor Rachel Reeves may introduce tougher property taxes in her upcoming autumn budget.
Mortgage borrowing also surged, with net advances rising to around £5.5 billion, the highest level since March.
At the same time, the effective interest rate on newly drawn mortgages fell by 0.07 percentage points to 4.19 percent—the lowest since January 2023—while the rate on outstanding balances held steady at 3.89 percent.
Analysts say the statistics suggest that demand in the housing market remains resilient, even as buyers face uncertainty over future tax burdens.
Some buyers and sellers, however, still report caution amid speculation of measures such as a “mansion tax” on homes valued over £2 million, expanded capital-gains taxes on main residences and changes to council tax or buy-to-let regulation.
Although the market appears to be holding up, real estate professionals warn that the full impact of possible tax reforms and cost-of-living pressures could weigh on affordability and transaction volumes beyond the short term.
With the budget date set for 26 November, many households and prospective buyers are said to be postponing decisions until clarity emerges about the tax landscape.
The latest data underscores a housing market at a crossroads: buoyed by falling borrowing rates and solid approvals, yet shadowed by looming fiscal changes that could influence the medium-term outlook for home-buyers and property owners alike.
This uptick comes despite mounting speculation that Chancellor Rachel Reeves may introduce tougher property taxes in her upcoming autumn budget.
Mortgage borrowing also surged, with net advances rising to around £5.5 billion, the highest level since March.
At the same time, the effective interest rate on newly drawn mortgages fell by 0.07 percentage points to 4.19 percent—the lowest since January 2023—while the rate on outstanding balances held steady at 3.89 percent.
Analysts say the statistics suggest that demand in the housing market remains resilient, even as buyers face uncertainty over future tax burdens.
Some buyers and sellers, however, still report caution amid speculation of measures such as a “mansion tax” on homes valued over £2 million, expanded capital-gains taxes on main residences and changes to council tax or buy-to-let regulation.
Although the market appears to be holding up, real estate professionals warn that the full impact of possible tax reforms and cost-of-living pressures could weigh on affordability and transaction volumes beyond the short term.
With the budget date set for 26 November, many households and prospective buyers are said to be postponing decisions until clarity emerges about the tax landscape.
The latest data underscores a housing market at a crossroads: buoyed by falling borrowing rates and solid approvals, yet shadowed by looming fiscal changes that could influence the medium-term outlook for home-buyers and property owners alike.
