Mortgage approvals for home purchases saw a significant decline in July, reaching their lowest level in more than two years. The Bank of England figures show 56,053 approvals for house purchases in July, a decrease from 58,215 in June.
This figure represents the lowest total since January 2024, when 56,032 approvals were recorded. The decline suggests that higher borrowing costs and broader economic uncertainty are continuing to impact buyer activity.
In contrast, remortgage activity increased, with approvals for borrowers switching lenders rising to approximately 34,500 in July, up from 34,100 in June.
The Nationwide House Price Index indicated little movement in property values, with average UK house prices increasing by 0.2% month-on-month in August, following a 0.1% decline in July. The average property value stood at £275,465, with annual house price growth at 1.6%.
Lucian Cook, head of residential research at Savills, noted that underlying affordability is gradually improving, but increased fixed-rate mortgage costs in mid-July have prevented this from translating into improved market activity. Hina Bhudia, partner at Knight Frank Finance, added that geopolitical tensions and elevated energy prices pushed mortgage rates higher over the summer, affecting demand.