Brief

UK mortgage approvals fall to lowest level since December 2023

The Bank of England’s latest data shows a decline in new mortgage approvals and remortgaging, reflecting affordability pressures amid rising rates.

By Felo News Desk · Published Tue, 29 Sep 2026 12:06:29 GMT

Bank of England data released on 29 September shows that 54,900 mortgage approvals were granted for house purchases in August, down from 55,900 in July. This is the lowest figure since December 2023 and below the six‑month average of about 60,100.

Remortgaging approvals also slipped, falling to 34,000 in August from 34,600 in July. The effective interest rate on newly drawn mortgages rose to 4.6% in August, up from 4.45% in July, signalling higher borrowing costs for homeowners.

Experts interpret the drop as a sign of cooling demand in the housing market. Katie Clinton, head of financial services advisory at KPMG UK, said the fall “points to affordability pressures continuing to weigh on housing demand, as the shocks from the Iran conflict push up both inflation and mortgage rates.” She added that the decline in remortgaging suggests a drop in refinancing activity.

Key facts

54,900 mortgage approvals in August 2026 (standard.co.uk)
Lowest approvals since December 2023 (standard.co.uk)
Effective interest rate rose to 4.6% in August (standard.co.uk)
Remortgaging approvals fell to 34,000 in August (standard.co.uk)

Background

Earlier Felo coverage on 15 September noted that average two‑year and five‑year fixed mortgage rates had risen to their highest levels since 2022, reflecting broader market tightening. A 23 September article reported that 30‑year fixed rates had topped 7% for the first time in over two years, further underscoring affordability challenges.

Why it matters

Higher mortgage rates and lower approval numbers indicate tightening credit conditions, which can slow housing market activity and impact related sectors such as construction and home furnishings.