UK Mortgage Approvals Fall to Two-Year Low

Net mortgage approvals for house purchases in the UK fell to 59,999 in January 2026, down from 61,007 in December and below market expectations of 62,000, marking the lowest level since January 2024. The decline highlights the broader cooling in the UK housing market, which was weighed down last year by the expiry of a temporary tax break on certain home purchases and subdued buyer demand ahead of the November annual budget. Remortgage approvals, covering refinancing with a different lender, also fell to 38,100 in January from 38,400 in December. The effective interest rate on newly drawn mortgages edged down to 4.09% from 4.15%, while the rate on the outstanding stock of mortgages slipped slightly to 3.90% from 3.92%.

Net mortgage approvals for house purchases in the UK fell to 61,013 in December 2025, down from a downwardly revised 64,072 in the previous month and well below market expectations of 64,800. This marked the lowest level since June 2024, underscoring the broader cooling in the UK housing market through 2025. Activity weakened after the expiry of a temporary tax break on certain home purchases, while buyer demand was further restrained in the run-up to Finance Minister Rachel Reeves’ annual Budget in November, as households delayed decisions amid concerns that higher-value properties could face increased taxation. Meanwhile, approvals for remortgaging, which only include refinancing with a different lender, rose by 1,600 to 38,400 in December. The effective interest rate on newly drawn mortgages edged lower to 4.15% in December, from 4.20% in November. Meanwhile, the rate on the outstanding stock of mortgages increased slightly to 3.92%, up from 3.90% the month before.

Net mortgage approvals for house purchase in the UK fell by 500 to 64,500 in November 2025, the lowest in five months but above market expectations of 64,400. Uncertainty around new taxes on high-value homes and broader fiscal changes weighed on housing sentiment, alongside a surprise fall in house prices. By contrast, approvals for remortgaging, which only capture remortgaging with a different lender, rose by 3,200 to 36,600 in November. The ‘effective’ interest rate on newly drawn mortgages increased for the first time since February 2025 (4.53%), to 4.20% in November from 4.17% in October. The rate on the outstanding stock of mortgages was 3.90% in November, up from 3.89% in the previous months.