UK Mortgage Approvals Surge to Nine-Month High Despite Budget Tax Uncertainty
Approvals rise to around 65,900 in September as borrowing ticks up ahead of the autumn Budget
British lenders approved approximately 65,900 mortgages for house purchases in September 2025, the highest monthly level since December 2024, according to the Bank of England.
The figure surpassed expectations and underscores resilience in the housing market even as the upcoming Budget looms large.
Net mortgage borrowing increased to about £5.5 billion in the month, the strongest reading since March, while the average effective interest rate on newly drawn mortgages fell to 4.19 percent, the lowest since January 2023. Meanwhile, remortgaging approvals dipped slightly to approximately 37,200.
The approval strength comes amid speculation that Chancellor Rachel Reeves may impose higher levies on property purchases or home ownership in the Budget scheduled for 26 November.
Many analysts had expected buyer activity to slow in advance of possible tax changes, yet the data suggests demand remains firm.
While house-price growth has weakened in recent months—with some surveys even showing small declines—mortgage approvals indicate that buyer confidence is holding up.
Industry commentators note that lenders appear ready to lend and that buyers are pressing ahead despite policy uncertainty.
Nonetheless, risks remain.
The potential for tax increases in the Budget and elevated borrowing costs could dampen momentum in 2026. For now, the combination of more affordable mortgage rates and stable approvals points to a housing market navigating through fiscal uncertainty with unexpected robustness.
The figure surpassed expectations and underscores resilience in the housing market even as the upcoming Budget looms large.
Net mortgage borrowing increased to about £5.5 billion in the month, the strongest reading since March, while the average effective interest rate on newly drawn mortgages fell to 4.19 percent, the lowest since January 2023. Meanwhile, remortgaging approvals dipped slightly to approximately 37,200.
The approval strength comes amid speculation that Chancellor Rachel Reeves may impose higher levies on property purchases or home ownership in the Budget scheduled for 26 November.
Many analysts had expected buyer activity to slow in advance of possible tax changes, yet the data suggests demand remains firm.
While house-price growth has weakened in recent months—with some surveys even showing small declines—mortgage approvals indicate that buyer confidence is holding up.
Industry commentators note that lenders appear ready to lend and that buyers are pressing ahead despite policy uncertainty.
Nonetheless, risks remain.
The potential for tax increases in the Budget and elevated borrowing costs could dampen momentum in 2026. For now, the combination of more affordable mortgage rates and stable approvals points to a housing market navigating through fiscal uncertainty with unexpected robustness.
