UK Mortgage Borrowing Falls Sharply in July

Net mortgage borrowing by UK individuals fell to £4.3 billion in July, down from £7.7 billion in June and below the previous six-month average of £5.3 billion. The annual growth rate of net mortgage lending was unchanged at 3.6%. Gross secured lending also eased to £25.9 billion from £26.9 billion, slightly below its six-month average of £26.4 billion. Repayments edged up to £21.3 billion from £21.2 billion, remaining above the six-month average of £20.8 billion. The effective interest rate on newly drawn mortgages rose to 4.45% in July from 4.35% in June, while the rate on the outstanding mortgage stock increased slightly to 3.97% from 3.96%.

Net mortgage borrowing by UK households surged to £7.7 billion in June 2026 from £3.3 billion in May, far exceeding market expectations of £3.95 billion and the previous six-month average of £4.9 billion, despite rising borrowing costs. The annual growth rate of net mortgage lending also edged up to 3.6% from 3.5%. Gross mortgage lending rose slightly to £27.4 billion from £27.2 billion, remaining above the six-month average of £26.0 billion. Meanwhile, repayments fell to £21.3 billion from £22.7 billion, although they continued to exceed the recent six-month average of £20.4 billion. Meanwhile, the effective interest rate on newly drawn mortgages climbed to 4.35% in June from 4.22% in May, its highest level in more than a year. The average rate on the outstanding stock of mortgages also increased, reaching a record high of 3.96%.

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%.