UK Mortgage Approvals Plummet to Two-Year Low Amid Rising Costs

Mortgage approvals in the UK hit their lowest level in over two years according to new figures from the Bank of England. In July, about 56,053 mortgages were granted for home purchases, a drop from June's total and the lowest since January 2024 when approvals stood at 56,032.

In contrast, remortgaging approvals saw an increase in July, with approximately 34,500 approvals recorded, up from 34,100 in June. This trend suggests that borrowers are becoming more willing to explore options due to shifts in interest rates.

Nationwide Building Society reported a marginal increase in the average UK house price, climbing by 0.2% month-on-month in August to reach £275,465. This figure represents a 1.6% rise compared to the same period last year, despite signs of a cooling housing market.

Experts attribute the stagnation in mortgage approvals to rising fixed-rate mortgage costs that emerged in mid-July, hindering any positive momentum in home-buying activities. Lucian Cook from Savills expressed skepticism regarding the potential for a market recovery in the coming months, citing ongoing inflationary pressures.