UK mortgage approvals fall in September as borrowing slows

UK mortgage approvals declined in September, while household borrowing slowed and mortgage interest rates edged higher, according to figures released by the Bank of England on Thursday.

Net mortgage approvals for house purchases fell to 53,400 in September from 54,800 in August, below the previous six-month average of 58,800.

Approvals for remortgaging, meanwhile, increased to 42,600 from 34,000.

Net mortgage borrowing by individuals declined to £3.9 billion from £4.2 billion in August, below the previous six-month average of £4.9 billion.

The effective interest rate on newly drawn mortgages rose to 4.63% in September from 4.60% in August, while the rate on outstanding mortgages increased to 4.03% from 4.00%.

Consumer credit borrowing also slowed, falling to £1.9 billion from £2.7 billion in August. Within this, credit card borrowing declined to £700 million from £1.3 billion, while other consumer credit borrowing eased to £1.2 billion from £1.4 billion.

The annual growth rate of consumer credit edged up to 9.8% from 9.7%.

UK households deposited £4.7 billion with banks and building societies in September, the BoE said, compared with £4.9 billion in August, including £5.0 billion into individual savings accounts.

UK non-financial businesses borrowed a net £9.3 billion in bank loans during September, up from £4.7 billion in August, driven by increased borrowing among large businesses.

The annual growth rate of broad money, measured by M4ex, slowed to 4.0% in September from 4.5% in August.

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