The Bank of England Money and Credit report for August 2025 shows a decrease in net mortgage approvals for house purchases, down by 500 to 64,700, bringing three consecutive months of growth to an end. Approvals for remortgages decreased by 900 to 37,900.
Net borrowing of mortgage debt by individuals decreased by £0.2 billion to £4.3 billion in August, following a £0.9 billion decrease in July.
‘While mortgage approvals have dipped slightly on a monthly basis this is almost certainly down to summer seasonality and the broader picture remains one of resilience, with activity consistently holding above the 60,000 threshold for well over a year’, said Stephanie Daley, director of partnerships at mortgage adviser Alexander Hall.
“This level of consistency highlights that underlying buyer demand is strong, and recent incentives, such as the decision to make the Mortgage Guarantee Scheme permanent and adjustments to loan-to-income caps, are helping to improve accessibility and affordability across the market.
“At the same time, major lenders have already started to respond with more flexible criteria, enabling more buyers to secure the finance they need. Looking ahead, the outlook for the remainder of the year remains positive, and we expect these supportive measures to underpin continued buyer activity.”
Colby Short, co-founder and CEO of GetAgent, said the slight decline isn’t surprising. He added:
“The broader picture, however, remains one of consistency and with an improving mortgage landscape offering more products, sharper rates, and greater flexibility, demand is being well supported.
“The latest hold on the base rate will only help to steady the ship as we head into a traditionally busy time of year, leaving the market well positioned for a late surge to the finish line in 2025.”
Amid ongoing uncertainty surrounding property taxes, Anthony Codling, managing director of equity research at RBC Capital Markets, believes the figures are positive. He explained:
“Today’s approval number points to the resilience of the UK housing market (today’s figure was just 1.9% below the five-year average and 0.8% lower than the ten-year average). We suspect that the housing market will tread water for the rest of the year.
“However, the UK Government needs more than a stable market to see growth in housebuilding volumes, and we believe there is a small but growing chance that we may see some measures in the Budget to boost housing demand to stimulate housing supply.”
Ian Futcher, financial planner at Quilter, said the figures highlight continued pressures on the housing market, with residual effects of stamp duty changes and ongoing affordability issues continuing to dampen activity.
He commented:
“Although a summer slowdown is typical, when combined with the other ongoing market pressures, including budget rumours, it could have wider implications for house prices. We are already seeing a dip in demand for homes over £500,000, for example. However, as we move further into the autumn and winter, the market will have had time to adjust to the stamp duty changes and more prospective buyers will have built up their savings enough to cover the higher tax bills, so we could see a gradual return of momentum.”
Continued economic and budget uncertainty combined with a seasonal quiet spell have contributed to the decrease in approvals, according to Propertymark CEO Nathan Emerson.
He added:
“However, the Bank of England’s freeze on interest rates last week will contribute to future confidence and stability in the mortgage market now that people on variable mortgages and those looking to finance their next home move have additional reassurance of static rates for now. We now look to November, which is when the next interest rate decision will be made.
“It is important that consumers monitor upcoming mortgage deals, as they can vary significantly given current economic circumstances.”
The Bank of England’s Money and Credit report for August is at https://www.bankofengland.co.uk/statistics/money-and-credit/2025/august-2025
