The Bank of England has reported that net borrowing of mortgage debt by individuals remained at £6.1 billion in September.

However, mortgage approvals for house purchases fell significantly to 66,800 in September from 74,400 in August.

Meanwhile, the ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages increased by 29 basis points to 2.84% in September.

Consumers borrowed an additional £0.7 billion in consumer credit, on net, below the additional £1.2 billion borrowed in August – entirely driven by lower credit card borrowing of £0.1 billion against £0.7 billion in August.

Steve Seal, CEO, Bluestone Mortgages, said: “With inflation hitting a 40-year high this month, it’s unsurprising we’ve seen a dip in mortgage approvals. And, with last month’s mini-Budget triggering extreme swap rate volatility, we’ve seen lenders withdraw products from the market, which will undoubtedly make the homeownership dream harder.

“For those worried about the current lending environment and how it will impact their ability to get onto the housing ladder, we urge you to speak with a mortgage broker. Not only do these professionals have a vital role to play in supporting existing and would-be borrowers, but they can highlight the options available to suit their unique circumstances.

“It’s the duty of our industry and at the core of what we do to remind these customers that there’s still hope for them to reach their homeownership dreams.”