Individuals borrowed £39.5bn of mortgage debt on net in September 2021, the highest since June 2021, new figures published by the Bank of England (BoE) have revealed.

The BoE’s latest Money and Credit statistical release showed that mortgage approvals for house purchase fell further to 72,600 in September from 74,200 in August, but remains above pre-February 2020 levels.

Karthik Srivats, co-founder of mortgage lender Ahauz, said:“While all the talk in September was about the squeeze on incomes and faltering economic growth, on the mortgage frontline things accelerated back to a gallop.

“Mortgage borrowing more than doubled from its August level to £9.5bn, the highest monthly level since the record-smashing figures seen in June. It’s likely that the jump in activity was powered in part by a late surge of buyers desperate to complete their purchases before the end of England’s stamp duty holiday. Even though total new borrowing remains below the all-time high seen in summer, the market’s momentum continues to push up average house prices and pile extra pressure on first-time buyers trying to make the sums work. That said, interest rates remain highly competitive and we expect approvals to remain well ahead of pre-pandemic levels for some time to come. With the supply of homes for sale not even close to keeping up with buyer demand, it’s unlikely the market will cool significantly in the months ahead. With the Governor of the Bank of England dropping increasingly heavy hints that an interest rate rise is coming, this remains a challenging environment for first-time buyers.”

Consumers borrowed an additional £0.2bn in consumer credit, on net. The effective rate on new personal loans increased to 6.02% in September, and is the highest since March 2020 but remains below the January 2020 level.

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