UK: Mortgage Approvals Hit Lowest Level Since Early 2024

09:06

The UK housing market is showing new signs of slowdown. Banks issued significantly fewer mortgage loans in July, reaching their lowest level since January 2024. At the same time, consumer credit has increased more than economists anticipated.

The British property market experienced a slowdown in July. According to data published on Tuesday by the Bank of England, lenders approved 56,053 mortgage loans for home purchases during the month.

This is the lowest level recorded since January 2024. The figure also marks a decline from the 58,215 approvals reported in June and is significantly below the forecasts of economists surveyed by Reuters, who had predicted a median of 59,500 loans.

A Sign of Weakness for the Housing Market

The decrease in loan approvals is an important indicator for the British real estate market. Indeed, financing requests reflect, with a certain delay, the capacity and willingness of households to realize a purchasing project.

The decline observed in July suggests that real estate activity remains under pressure, despite efforts to improve financing conditions for households.

The drop is even more notable as it comes after a June that was already marked by a level below expectations. However, this trend will need to be confirmed by data from the coming months before it can be considered a lasting trend.

Households Continue to Rely on Credit

The slowdown in mortgage credit contrasts with the evolution of consumer credit.

Net unsecured loans granted to consumers increased by £2.006 billion in July. This growth exceeds the average estimate of economists, who anticipated an increase of £1.8 billion.

It is also the largest increase recorded since November 2025.

This evolution shows that the demand for household financing is not completely disappearing. It seems to be shifting more towards everyday expenses and credit-financed purchases rather than towards real estate acquisitions.

A Contrast Monitored by the Bank of England

The figures published by the Bank of England thus provide two different indications about the financial behavior of British households.

On one hand, home purchasing projects appear to be slowing down, as suggested by the decline in loan approvals. On the other hand, consumption continues to benefit from an increased reliance on credit.

This divergence will be particularly monitored by economists and markets, as it provides insights into the strength of domestic demand and the financial situation of households.

Housing Remains a Sensitive Point in the UK Economy

The real estate sector plays a significant role in the UK economy. Changes in borrowing rates, housing prices, and access to credit directly influence household decisions and, more broadly, economic activity.

The level reached in July thus serves as a reminder that the mortgage credit market remains fragile. With 56,053 approved loans, the volume is now at its lowest level in over two years.

However, the simultaneous increase in consumer credit paints a more nuanced picture: British households continue to borrow, but their financing needs are not currently focused on real estate purchases.