UK Mortgage Market Edges Higher Despite Soaring Interest Rates

The mortgage market in the UK showed resilience in Q2 of this year despite higher interest rates. The Bank of England's latest data shows that new mortgage commitments rose by 1.4% from the previous quarter to £79.2 billion, and were 1.3% higher than in Q2 2025.

The value of gross mortgage advances increased by 11.1% from Q1 to £77.4 billion, a 31.7% rise compared to the same period last year.

However, there are signs that borrowers are feeling the strain of higher rates. The share of advances with interest rates less than 2% above Bank Rate decreased by 0.2 percentage points from the previous quarter to 94.5%, a level not seen since Q1 2023.

Nathan Emerson, CEO of Propertymark, said that 'the value of gross mortgage advances increase during the second quarter of 2026' is 'extremely welcome news', but added that 'affordability has rightly been in sharp focus'. Richard Pike, sales and marketing director at Phoebus Software, noted that the market remains uncertain due to the economic outlook and interest rates.