Mortgage Approvals Plummet to Two-and-a-Half Year Low

UK mortgage approvals have fallen to their lowest level since December 2023, as elevated borrowing costs and living expenses weighed on housing demand.

The number of approved mortgages for home purchases dropped to 54,900 in August, down from 55,900 the previous month, according to Bank of England data. This is below the six-month average of about 60,100.

The effective interest rate on newly drawn mortgages also increased to 4.6% in August, up from 4.45% in July, reflecting the actual interest paid on home loans.

Experts said the decline in mortgage approvals signals a slowdown in demand among home buyers and suggests that affordability pressures will continue to affect housing demand.