UK Mortgage Approvals Fall to Lowest Since End of 2023
Affordability pressures and higher borrowing costs weighed on housing demand as remortgaging approvals also slipped to 34,000, the Bank of England said.
- The Bank reported 54,900 mortgage approvals for house purchases in August, down from 55,900 in July, marking the lowest level since the end of 2023.
- Higher borrowing costs contributed to the decline as the effective interest rate on newly drawn mortgages increased to 4.6% in August, up from 4.45% in July.
- Lucian Cook, head of residential research at Savills, noted the fourth consecutive month with fewer than 60,000 approvals, compounded by limited housing wealth growth for homeowners since 2022.
- Upsizers are delaying moving plans until they gain confidence in personal finances, while remortgaging approvals dropped to 34,000 from 34,600, reflecting softened refinancing demand.
- Affordability pressures continue weighing on demand as shocks from the Iran conflict push up both inflation and mortgage rates, Katie Clinton, head of financial services advisory at KPMG, observed.
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