Mortgage Approvals Plummet in UK as House Prices Lag Inflation

The Bank of England released data on Tuesday indicating that British lenders approved the fewest mortgages for house purchases since January 2024 in July. According to the BoE, lenders approved only 56,053 mortgages in July, which is below all forecasts in a Reuters poll of economists who had predicted a rise to 59,500.

The data also showed that net unsecured lending to consumers rose by £2.006 billion ($2.71 billion) on the month, which is above economists' forecast of a £1.8 billion increase and the biggest rise since November 2025.

Ruth Gregory, deputy chief UK economist at Capital Economics, commented on the data saying 'July's money and lending figures show that the near-term outlook for the housing market is weak, households may have funded some of their spending in July by lowering their saving rate and borrowing more, and overall monetary conditions are not conducive of a long period of high inflation.'

Nationwide reported earlier on Tuesday that house prices rose 1.6% in the 12 months to August, which is well below the rate of consumer price inflation.