Net mortgage approvals for house purchases fell to 56,100 in July, down from 58,200 in June. The Bank of England’s Money and Credit report for July also reveals net mortgage borrowing of mortgage debt by individuals was at £4.3 billion in July, down from £7.7 billion in June.
The previous six-month average was £5.3 billion. Approvals for remortgaging increased slightly to 34,500, up from 34,100 in June.
Property experts have called on the prime minister to introduce measures that will boost the housing market in the autumn budget.
Gareth Lewis, deputy CEO of specialist lender MT Finance, said: “Earlier this year, approval numbers were picking up quite nicely, before dipping in May and now falling again. We are seeing the ramifications of the unstable interest rate environment and the impact this has on transactions.
“There urgently needs to be stimulus for the housing market, with the new prime minister required to do something to encourage transactions and activity, which will benefit the wider economy.”
Anthony Codling, managing director, equity research, RBC Capital Markets, agrees. He said: “UK mortgage approvals for house purchase fell to 56,053 in July, down 3.7% month-on month and down 15.0% year-on-year. The print sits 7.3% below the five-year average and 13.0% below the ten-year average, marking a disappointing retreat from the firmer run-rate we’d grown accustomed to through much of 2024 and early 2025.
“This is a pebble in the shoe for housebuilders who had been cautiously optimistic that demand momentum would hold through the summer. The July figure suggests buyers are pulling back, not what the sector needs as it heads into the all-important autumn selling season. However, this weak data may spur the UK Government on to stimulate the UK housing market in next month’s budget.”
According to Nathan Emerson, CEO at Propertymark, the figures reflect the continued pressure on household finances. “With the autumn budget due next month, many people may be holding back on major housing decisions until there is greater economic clarity, particularly groups such as first-time buyers, for example.
“Across the year, we have seen ambition across all nations regarding the delivery of new sustainable homes, alongside the infrastructure needed to support new developments. As the year draws to a close, it would be encouraging to see mortgage approvals and net lending find a firmer footing. However, this is likely to remain closely aligned with the wider global economy.”
