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The number of mortgage approvals made to home-buyers tumbled in July to its lowest level in more than two years, according to Bank of England figures. Some 56,053 mortgages were approved for house purchase in July, marking the lowest monthly figure since January 2024, when there were 56,032 approvals, the Bank’s report said. In June this year, 58,215 mortgage approvals were made to home-buyers.
Over the past six months, monthly mortgage approvals for house purchases have averaged about 60,800, the Bank said. Meanwhile the Bank’s remortgaging approvals figures, which only capture remortgaging with a different lender, showed an increase to about 34,500 in July, from 34,100 in June. The figures were released as Nationwide Building Society said the average UK house price edged up by 0.2% month-on-month in August, following a 0.1% dip in July.
Across the UK, the average house price in August was £275,465 – up by 1.6% annually, Nationwide said. Lucian Cook, head of residential research at property firm Savills , said that while underlying house price affordability has shown signs of gradually improving: “The increase in fixed rate mortgage costs we saw in mid-July, has prevented that from translating into any improvement in activity in the market, leading to a third consecutive month of weak mortgage approvals. “And with more inflation to work its way through the system, it seems unlikely that we will see much of a sustained turnaround over the course of the remainder of the year.” Get a free fractional share worth up to £100.
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Capital at risk. Terms and conditions apply. Go to website ADVERTISEMENT Hina Bhudia, a partner at Knight Frank Finance, said: “Geopolitical tensions and elevated energy prices pushed mortgage rates higher during the summer, which has weighed on demand in the housing market.” Mark Harris , chief executive at mortgage broker SPF Private Clients, said: “On the ground, some lenders have been easing mortgage rates in recent days and weeks but swap rates, which underpin the pricing of mortgages, remain extremely volatile in response to tensions in the Middle East.” He added: “Remortgaging numbers picked up slightly, suggesting that borrowers may be shopping around for better rates rather than sticking with their existing lender when their current deal comes to an end.” The Bank of England’s Money and Credit report also said that people’s net borrowing of consumer credit increased to £2.0 billion in July, from £1.9 billion in June, which was also slightly above the previous six-month average of £1.9 billion.
Within the total, net borrowing through credit cards was £0.9 billion in July, down from £1.0 billion in June. Net borrowing through other forms of consumer credit, such as car dealership finance and personal loans, increased to £1.1 billion in July, from £0.9 billion in June. Households’ deposits with banks and building societies increased by £3.8 billion in July, following net deposits of £6.2 billion in June.
The report also said that UK non-financial businesses borrowed, on net, £1.8 billion of loans from banks and building societies, including overdrafts, in July, following £1.6 billion of net borrowing in June.
Source: The Independent
