Mortgage lending in the UK weakened sharply in July, with the number of loans approved for house purchases falling to its lowest level since early 2024, according to new data from the Bank
of England.
Lenders gave the green light to 56,053 mortgages for home purchases during the month, down from a revised 58,215 in June. The figure was significantly below the 59,500 approvals economists had expected in a Reuters poll, highlighting a renewed loss of momentum in the housing market.
The July total was the weakest since January 2024 and suggests that prospective buyers remain cautious despite borrowing costs having fallen substantially from their recent peak.
The Bank of England's figures also pointed to stronger consumer borrowing. Net unsecured lending to households increased by £2.006 billion in July, exceeding the £1.8 billion rise anticipated by economists. It was the largest monthly increase since November 2025.
The contrasting trends suggest households may be relying more heavily on credit to support spending while remaining reluctant to take on the much larger financial commitment associated with buying a home.
Ruth Gregory, deputy chief UK economist at Capital Economics, said the latest figures pointed to a subdued near-term outlook for the property market. She also suggested that some households may have supported their spending by saving less and borrowing more.
The data come as the housing market continues to contend with relatively weak price growth. Nationwide reported separately that UK house prices increased by just 1.6% in the year to August. That pace remained well below the prevailing rate of consumer price inflation, indicating that house prices are still struggling to deliver meaningful real-term gains.
The mortgage figures will add to concerns that elevated financing costs and uncertainty over household budgets are continuing to weigh on housing demand. Although interest rates have fallen considerably from their previous highs, mortgage affordability remains an important constraint for potential buyers.
Attention is now turning to the Bank of England's next policy decision. Financial markets broadly expect the central bank to leave its benchmark interest rate unchanged at 3.75% this month. Investors, however, are currently pricing in a possible 25-basis-point increase before the end of the year.
A combination of weaker mortgage approvals, subdued house-price growth and stronger unsecured borrowing presents a mixed picture for the UK consumer and economy. While households continue to spend, the latest figures suggest they may be becoming more cautious about making major long-term financial commitments such as purchasing property.
