September sees highest number of mortgage approvals in 2025

Latest housing market trends showed positive signs in September, but how will the upcoming Budget affect activity?

Although many individuals looking to take out a mortgage continue to face challenges, activity in the housing market remained strong in September.

The number of net mortgage approvals for house purchases (which can indicate future borrowing) increased by 1,000 to reach 65,900 in September, the highest this figure has been since December 2024. This is according to data from the latest Money and Credit report from the Bank of England.

Moreover, net borrowing of mortgage debt rose by £1.2 billion to reach a six-month high of £5.5 billion in September. The last time this figure was higher was March 2025, when net borrowing soared to £13.2 billion as many buyers rushed to complete their purchases before the temporary stamp duty relief expired at the end of the month.

“The latest statistics paint a positive picture for house purchases in September, off the back of a weaker August. However, it is worth noting that different times of the year can record seasonal dips or rises for house purchase,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, commented.

Despite the encouraging signs for the overall market, remortgaging activity with a different lender slowed down in September as the number of approvals dropped by 600 to 37,200.

How could the Budget impact the housing market?

After a relatively buoyant September for the housing market, there will be mounting speculations on the upcoming Budget on 26 November and how it could affect existing and prospective homeowners.

Springall notes that some borrowers may be “sitting on the fence" and delaying any decisions until after the Budget, so they have more clarity on how any tax or policy changes could impact their situation.

For example, there are rumours that the Chancellor of the Exchequer, Rachel Reeves, could announce reforms to property taxes, including replacing stamp duty and council tax with new forms of taxation. Some of the other potential changes that are circulating in the news could particularly affect those buying and selling higher-value properties, such as a “mansion tax”, but none of these have been confirmed.

As these rumours circulate, it may not be surprising to see a slowdown in property sales as buyers and sellers wait and see what the Budget has in store for them.

Future mortgage cuts look “promising”

Affordability continues to be a challenge for many borrowers, particularly those taking their first steps on the property ladder.

However, although average mortgage rates edged higher between September and October, Springall points out that “mortgage rates have been on the downward trend” over recent weeks.

“It looks promising for more fixed rate cuts to continue due to swap rate moves (which lenders watch very closely to re-price their loans),” she added.

Anyone planning to take out a mortgage may find it useful to speak to a mortgage broker. A broker can help borrowers navigate the range of mortgage deals available, as well as offering some guidance on the effect that any policy changes could have on their situation.