UK Mortgage Approvals Fall to Lowest Level Since January 2024

London, September 2, 2026: UK mortgage approvals for house purchases fell to their lowest level in more than two years in July, signalling weaker demand in the housing market amid continued pressure from borrowing costs.

Lenders approved 56,053 mortgages for home purchases in July, down from a revised 58,215 in June and below economists’ expectations of 59,500. The figure was the lowest recorded since January 2024.

The decline comes as mortgage borrowing remains relatively expensive. The effective interest rate on newly drawn mortgages rose to 4.45% in July from 4.35% in June, adding pressure on households considering a property purchase.

Meanwhile, net unsecured consumer borrowing increased by £2.006 billion in July, exceeding economists’ forecast of £1.8 billion. The increase suggests some households may be relying more on borrowing as household finances remain under pressure.

Despite the weaker mortgage activity, UK house prices continued to rise modestly. Nationwide reported annual house price growth of 1.6% in August, although the pace remained below consumer inflation.

 

What It Means for Property Buyers

The fall in mortgage approvals points to a cautious housing market, with high financing costs continuing to influence purchasing decisions. Buyers may remain price-sensitive, while sellers could face a more competitive market if demand stays subdued.

The Bank of England is expected to maintain its 3.75% interest rate at its September meeting. The outlook for mortgage rates and household borrowing will remain important for the UK property market in the months ahead.