Fall in mortgage approvals reflects July price volatility
Summary
The Bank of England’s latest Money and Credit report shows a July decline in both mortgage borrowing and mortgage approvals, with approvals falling below recent averages. Commentators cited mortgage pricing volatility, affordability pressures and higher fixed-rate costs as key factors weighing on activity, although remortgaging approvals were broadly stable.
Why it matters
Mortgage approvals and borrowing trends are useful indicators of buyer demand, affordability and transaction momentum in the residential market. Surveyors may see this reflected in valuation assumptions, instruction volumes and the pace of sales activity.
Key points
- Net mortgage borrowing fell to £4.3 billion in July from £7.7 billion in June.
- Mortgage approvals for house purchases dropped to 56,100, below the six-month average.
- The effective rate on newly drawn mortgages rose to 4.45% in July.
- Remortgaging approvals were broadly stable at 34,500.
- Commentary points to affordability and rate volatility as the main drag on activity.
Organisations:
Bank of England, Jackson-Stops, Phoebus Software, Savills
Locations:
England
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