1 September 2025
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 latest Money and Credit data from the Bank of England underscores the ongoing challenges facing the housing market. The lingering impact of stamp duty threshold changes, coupled with persistent affordability concerns and the usual summer slowdown, continue to weigh heavily on activity.
“Net borrowing of mortgage debt dropped markedly following the changes to stamp duty earlier in the year, but had been gradually recovering. However, it seems the summer lull has weighed on the market further, as net borrowing decreased by £0.9 billion to £4.5 billion in July, down from £5.4 billion in June. Meanwhile, net mortgage approvals for house purchases - a key indicator of future borrowing - edged up only slightly, increasing by just 800 to 65,400 in July. Remortgaging activity has dropped off further, with approvals falling by 2,700 to 38,900.
“While a seasonal dip is to be expected, the sluggish start to 2025 means this lull could have a broader impact on house prices. That said, by autumn, the stamp duty changes will be more fully absorbed, and buyers will have no choice but to adapt to the new landscape. As such, we could see momentum gradually pick back up.
“Elsewhere, consumer credit borrowing ticked up once again, rising to £1.6 billion compared to £1.5 billion in the previous month. This was driven partially by further reliance on credit cards, which rose to £0.8 billion in July from £0.7 billion in June, as well as an increase in other forms of consumer credit borrowing, such as car finance and personal loans, which rose to £0.9 billion from £0.7 billion. With interest rates on these products still elevated, this continued uptick in borrowing raises some concerns about longer-term financial resilience.
“On a more encouraging note, households have continued to top up their savings. Deposits with banks and building societies rose by £7.3 billion in June. While this is down from the £8.0 billion in June, it has still resulted in households saving a further £2.7 billion into ISAs and £4.3 billion into interest bearing accounts, as well as £1.6 billion into non-interest bearing accounts. While reliance on credit has continued to creep upwards, the level of savings suggests that some households are still managing to set aside extra funds. With inflation currently rising and showing no signs of stopping just yet, it’s reassuring to see more people preparing financially.”
