Net mortgage approvals in the UK saw a slight increase in June, climbing by approximately three per cent to 58,200, up from 56,565 in May. This figure, released by the Bank of England, remains below the six-month average of around 61,400 and April's recent high of 65,900.
Net mortgage borrowing by individuals also rose significantly, reaching £7.7bn in June. This marks the highest level since March 2025 and is considerably more than May's £3.3bn, contrasting with a six-month average of £4.9bn.
Despite these increases, concerns are growing that a potential rise in interest rates could negatively affect the property market. Matt Swannell, chief economic adviser to the ITEM Club, suggested that the breakdown of the US-Iran ceasefire and a sharp increase in energy prices have pushed interest rate expectations back to levels seen in late February. Paul Dales, chief UK economist at Capital Economics, indicated that the rise in net mortgage lending might reflect a surge in completions from buyers who secured rates before the Iran conflict.
Official data from last week showed inflation decreased to 2.6 per cent in June, from 2.8 per cent the previous month. However, a think tank predicted on Wednesday that price growth could rise as high as 3.8 per cent. City analysts have warned that if inflation reaches four per cent, the Bank of England might be prompted to alter its interest rate policy.