Finance
UK lenders expect demand for mortgage and consumer credit to flatten
Published by Global Banking and Finance Review
Posted on October 16, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 16, 2025
2 min readLast updated: January 21, 2026
UK lenders expect stable mortgage demand in late 2025, per a Bank of England survey, reflecting a cooling housing market and cautious consumer borrowing.
LONDON (Reuters) -British lenders expect to see unchanged demand for mortgages in the last three months of 2025, according to a Bank of England survey published on Thursday that added to other signs of a cooling of the housing market.
The BoE's quarterly Credit Conditions Survey showed lenders reported no change in demand for loans for home purchases in the July-to-September period and a similar flat picture was expected between October and December.
Karim Haji, global and UK head of financial services at KPMG, said mortgage activity appeared more mixed than earlier in 2025 with some signs of easing demand for house purchases.
"This suggests the market may be pausing for further clarity on rate cuts rather than an abrupt downturn in buyer interest," Haji said.
The BoE held its benchmark Bank Rate at 4% in September and it has said the outlook for further reductions in borrowing costs depends on how the persistent inflation pressures in the economy develop.
The Royal Institution of Chartered Surveyors said last week that Britain's housing market lost momentum for a third month in a row in September, potentially due to worries about tax increases in finance minister Rachel Reeves' November budget.
The BoE's survey on Thursday showed lenders expected overall demand for unsecured lending to be unchanged in the fourth quarter, suggesting consumers were turning more cautious about borrowing.
(Writing by William Schomberg, Editing by Paul Sandle)
A mortgage is a loan specifically used to purchase real estate, where the property itself serves as collateral for the loan.
Consumer credit refers to the borrowing of funds by individuals to purchase goods and services, typically through loans or credit cards.
Interest rates are the cost of borrowing money, expressed as a percentage of the loan amount, which lenders charge borrowers.
The housing market is the marketplace for buying, selling, and renting residential properties, influenced by supply and demand dynamics.
The Bank of England is the central bank of the United Kingdom, responsible for monetary policy, issuing currency, and maintaining financial stability.
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