UK Mortgage Lending Falls to 6-Month Low

Net mortgage borrowing by UK individuals fell to £2.9 billion in May 2026, down from £4.4 billion in April and below market expectations of £4.6 billion. This marked the lowest level since May 2025 and was well under the six-month average of £5.1 billion, as rising mortgage rates and weakened consumer confidence amplified by the Iran war have suppressed buyer demand. The annual growth rate for net mortgage lending edged up slightly to 3.4% in May, from 3.3% in April. Gross secured lending dipped to £27.1 billion, from £27.4 billion in April, but remained above the six-month average of £25.3 billion. Meanwhile, repayments rose to £22.9 billion in May, up from £22.6 billion in April and above the six-month average of £19.9 billion. The effective interest rate on newly drawn mortgages rose to 4.22% in May, up from 4.08% in April, while the rate on outstanding mortgages remained steady at 3.92%.

Net borrowing of mortgage debt by UK individuals decreased to £4.4 billion in April 2026, the lowest in six months, from £6.8 billion in March and below the previous 6-month average of £5.1 billion. The annual growth rate for net mortgage lending increased slightly to 3.3% in April, from 3.0% in March. Secured gross lending decreased slightly to £27.5 billion in April, from £28.7 billion in March, still slightly above the 6-month average of £24.8 billion. Repayments increased in April to £22.7 billion, from £19.8 billion in March, above the 6-month average of £19.7 billion. The ‘effective’ interest rate on newly drawn mortgages increased, to 4.08% in April, from 4.03% in March. The rate on the outstanding stock of mortgages was 3.92% in April, down from 3.93% in March.

Net mortgage borrowing by UK individuals rose to £6.15 billion in March 2026, up from a revised £5.22 billion in February and exceeding market expectations of £4.2 billion. This marked the highest level in a year, surpassing the six-month average of £4.9 billion, as borrowing costs continued to decline. The annual growth rate for net mortgage lending eased to 3.0% in March from 3.4% in February. Secured gross lending increased to £28.7 billion, up from £24.0 billion in February and above the six-month average of £23.9 billion. Repayments also rose to £19.7 billion in March from £18.6 billion in February, slightly below the six-month average of £19.8 billion. The effective interest rate on newly drawn mortgages fell to 4.03% in March from 4.10% in February, while the rate on the outstanding stock of mortgages edged down to 3.93% from 3.95%.