30 January 2026
If you are covering the Bank of England Money and Credit statistics and the monthly property transaction data, please see the following comments from Karen Noye, mortgage expert at Quilter:
Bank of England Money and Credit statistics
Both the Bank of England (BoE) Money and Credit statistics and HMRC's property transaction data point to a housing market very much in a holding pattern. According to the BoE Net mortgage borrowing remained at £4.6 billion in December, with annual growth unchanged at 3.4%. House purchase approvals dipped slightly to 61,000, suggesting some caution among buyers, while remortgaging picked up as borrowers continue to review their options in a higher rate environment.
There are early signs of easing on pricing, with the effective rate on newly drawn mortgages edging down to 4.15%. Markets are currently pricing in the potential for two or three base rate cuts over the course of this year. If that materialises, mortgage rates should gradually drift lower, which could improve affordability and encourage more people to move. Even small reductions can make a meaningful difference to monthly repayments and stress test calculations.
Unsecured borrowing remains elevated. Although net consumer credit fell back in December, annual growth is still running at 8.2%, with credit card borrowing growing at over 12% year-on-year. With credit card rates above 21%, this is expensive debt and highlights the ongoing pressure on household budgets.
On the savings side, households added £4.8 billion to deposits in December, including strong inflows into ISAs ahead of the tax year end. From April 2027, the government plans to cap the amount that can be held in Cash ISAs at £12,000 for under-65s, with any additional ISA savings needing to be invested rather than kept in cash. While this has prompted renewed interest in ISA planning, it is worth remembering that many people do not fully use their £20,000 annual ISA allowance in the first place. For most savers, the priority remains building up a meaningful pot in a tax-efficient wrapper rather than worrying about hitting future caps.
UK property transactions data
A similar picture is painted by the property transaction data. Residential transactions remain broadly stable, with 100,440 seasonally adjusted sales in December, virtually unchanged from November and 5% higher than a year earlier.
The fact that volumes have settled rather than slumped suggests the market has adjusted to the new tax and interest rate landscape and found a more natural level after a year of higher stamp duty and mortgage prices.
With mortgage rates easing slightly and the prospect of further base rate cuts this year, there is potential for transaction levels to edge higher if borrowing costs continue to improve. However, affordability remains stretched compared to the ultra-low rate era, so any recovery is likely to be gradual rather than dramatic.
For buyers and sellers, this is a more balanced market. There is very little urgency in the market at the moment and the direction of interest rates will likely be the key driver of confidence over the coming year.
