Fewer UK house-purchase approvals in September as savers turn to ISAs
Victoria Shinder1 min readBritish households borrowed less across the board in September, according to the Bank of England's Money and Credit statistics published on 29 October.
Net mortgage borrowing fell to £3.9 billion from £4.2 billion in August, below the previous six-month average of £4.9 billion, and annual growth in net mortgage lending slipped to 3.4% from 3.6%. Net approvals for house purchase, an indicator of future lending, fell to 53,400 from 54,800, against an average of about 58,800 over the previous six months. Approvals for remortgaging with a different lender rose to 42,600 from 34,000.
Consumer credit slowed too. Net borrowing fell to £1.9 billion from £2.7 billion, slightly below the six-month average of £2.1 billion; credit card borrowing dropped to £0.7 billion from £1.3 billion, and other consumer credit such as car finance and personal loans to £1.2 billion from £1.4 billion.
Businesses borrowed £3.1 billion in total net finance after £8.5 billion in August, although bank loans within that rose to £10.6 billion from £6.4 billion, which implies net repayment of finance raised through markets. On the deposit side, the flow of sterling money, M4ex, fell to £3.9 billion from £16.9 billion. Households added £4.7 billion to their money holdings, including £5.0 billion into ISAs, while withdrawing £2.9 billion from non-interest-bearing accounts.
What it means
The pattern is consistent: fewer purchase approvals, more remortgaging and money moving into tax-free savings rather than spending. The release landed in the week of the Budget, so October's figures will be the first read on how households responded to it. The Bank's companion release on effective interest rates gives the price side of the same story.