1 September 2026
If you are covering the latest Bank of England money and credit statistics, please see the following comment from Ian Futcher, financial planner at Quilter:
“The July Money and Credit data paint a picture of a housing market that is losing momentum rather than building on the resilience seen earlier in the year. Mortgage borrowing fell sharply from £7.7bn to £4.3bn and, perhaps more significantly, net mortgage approvals for house purchase dropped to 56,100, well below the recent six-month average of around 60,800. As approvals tend to lead completed transactions, this points to softer activity in the months ahead. At a time when borrowers remain highly sensitive to interest rate expectations, the decline suggests many households are still taking a wait-and-see approach rather than committing to a move.
“While the mortgage market has not stalled altogether, higher borrowing costs continue to act as a brake on demand. The effective rate on newly drawn mortgages rose from 4.35% to 4.45% in July, reversing some of the optimism that had emerged earlier in the summer. For many prospective buyers, affordability remains stretched, and uncertainty over the future path of interest rates is making some reluctant to proceed with major financial decisions.
“The contrast between weaker mortgage activity and continued growth in consumer borrowing is also notable. Consumer credit rose to £2.0bn in July, with borrowing through personal loans and other forms of credit increasing despite a backdrop of elevated borrowing costs. The annual growth rate of consumer credit reached 9.2%, suggesting households are continuing to rely on unsecured borrowing to support spending.
“At the same time, households remain keen savers as net household deposits increased by £3.8bn, including £2.2bn flowing into ISAs during the month. This reflects a degree of financial caution, with many consumers seemingly balancing spending pressures against a desire to build cash reserves and take advantage of attractive savings rates.
“Taken together, the figures suggest households are becoming increasingly selective in how they use their money. Demand for housing finance has cooled, saving remains robust, and consumer borrowing is still growing. With the next Bank of England rate decision approaching, attention will be focused on whether policymakers see enough evidence to make a decision about rates. Until greater certainty emerges, housing market activity is likely to remain subdued and transaction levels may continue to fluctuate from month to month.”
