The build up to the Autumn budget has begun as home movers appear to be adopting a wait and see approach warned commentators following the release of the latest Bank of England Money and Credit Data covering August 2026.
The figures show net mortgage approvals for house purchases decreased to 54,900 in August, below an average of around 60,100 over the previous 6 months. Mortgage borrowing increased to £4.4 billion in August, from £4.1 billion in July, but remained below the previous 6-month average of £5.2 billion. Approvals for remortgaging decreased to 34,000 in August, from 34,600 in July.
The property market continues to battle economic headwinds said John Phillips, CEO of Just Mortgages and Spicerhaart. A dip in mortgage approvals in August is not surprising given it is prime holiday season, but lenders continue to err on the side of caution give the rate volatility caused by the ongoing geo-political climate. The BoE figures show interest rates on newly drawn mortgages increased to 4.60% in August, from 4.45% in July. The rate on the outstanding stock of mortgages was 4.00% in August, up from 3.97% in July.
“There’s no question that there’s some element of wait and see right now ahead of the Budget” said Phillips. “The hope is that this gives way to some pent-up demand – particularly as we find out more about the new Your First Home scheme. Like we’ve seen with other headline products that have come to the market recently, it is likely to generate interest and enquiries.”
Jason Tebb, President of OnTheMarket, echoed the sentiment: “Perhaps unsurprisingly, given the distractions of the particularly hot summer, approvals for house purchases dipped again in August, following July’s fall. They remain below the previous six-month average as ongoing political and economic uncertainty also has an impact on buyer and seller decision-making.”
Tebb added BoE interest rate holds in recent months “will help calm concerns assuming this approach continues into the autumn.” The recently announced Help to Buy replacement, Your First Home scheme, will potentially provide “some much-needed impetus for the housing market” said Tebb, although early indication are it will be restricted to new build property – “we await the details with interest.”
An “open minded” approach to the future direction of borrowing and the housing market is needed said Propertymark CEO Nathan Emerson: ““Many prospective buyers have understandably been taking a more cautious approach and waiting to see what measures are announced in the Autumn Budget. Any initiatives that help support first-time buyers and encourage activity across the housing market could provide valuable momentum for those looking to make their next move.”
Indeed, the figures show just how important the recently announced help to buy replacement scheme is said Anthony Codling, managing director, equity research at RBC Capital Markets: “The market needs a boost, the Government knows it needs a boost, and the Government is doing something about it. Therefore, we would hope to see angels not devils in the details in the Budget.”
