Net mortgage approvals for house purchases fell to 53,400 in September, which is below an average of 58,800 over the previous six months, and follows decreases in July and August, the Bank of England (BoE) has revealed.

The central bank’s latest Money and Credit Report found that remortgage approvals increased from 34,000 in August to 42,600 in September, while net borrowing of mortgage debt by individuals decreased from £4.2bn to £3.9bn in the same period.

This falls below the six-month average of £4.9bn, while the annual growth rate for net mortgage lending decreased to 3.4%, from 3.6% in August.

The BoE revealed that secured gross lending also increased slightly to £24.2bn in September, from £23.7bn in August. However, this is still below the six-month average of £26.3bn.

CEO at Just Mortgages and Spicerhaart, John Phillips, said the slowdown in approvals "really typifies the challenges facing the market", as buyers, sellers and lenders respond to what the Chancellor described as "global economic storms" in yesterday’s Budget.

He stated: "While I’m sure there has been an element of wait and see with the Autumn Budget, the hope is that now it is out the way, we see the release of some pent-up demand. I’m sure the news on the Your First Home scheme will undoubtedly help generate interest as that schemes gets set to launch.

"Even if the scheme helps enable brokers to engage positively with prospective clients or encourage them to open the door and seek advice, I’d count that as a real win. While the scheme has its sceptics, there’s a real opportunity to view it as the gateway to a broader conversation around the full range of options that are available right now to make homeownership a reality.

"As we head towards the end of the year, brokers will need stay proactive and remain visible, using all the tools at their disposal to give clients confidence and help them navigate this changing market."

Furthermore, household deposits with banks and building societies increased by £4.7bn in September, following net deposits of £4.9bn in August.

The central bank said this was driven by households depositing an additional £5bn into ISAs and £700m into interest-bearing sight deposit accounts.

Financial planner at Quilter, Ian Futcher, concluded: "In the run up to the Budget households remained keen savers as net household deposits increased by £3.9bn, including £5bn flowing into ISAs during the month. There were big outflows from non-interest bearing deposits, suggesting that consumers are looking to make their money work a little bit harder. With the cash ISA limit cut now abandoned, interest rates on the way up and the tax on savings income hiked further, people are looking to make their money work hard and better for them.

"Taken together, the figures suggest households are becoming increasingly aware of how the external environment is impacting their money. Demand for housing finance continues to cool, while saving remains robust, and consumer borrowing is growing gradually. With interest rates likely to rise at the BoE’s next decision, and those rates likely to stay higher for longer, this is an important time for consumers to be smart with their money and get working in the best way possible."

---