UK mortgage approvals hit 32-month low in August

Mortgage approvals in the United Kingdom fell to a 32-month low in August, according to the latest Bank of England data. Net approvals for house purchases dropped to 54,918, down from 55,928 in July, as potential buyers adopt a ‘wait and see’ approach ahead of the upcoming Autumn Budget.

Economic headwinds, including geopolitical tensions in the Middle East and rising borrowing costs, are driving the decline. Interest rates on newly drawn mortgages rose to 4.60% in August from 4.45% in July. Experts suggest that uncertainty regarding potential property tax increases in the new budget and the volatility of interest rates are causing consumers to remain cautious.

While mortgage borrowing increased slightly to £4.4 billion in August, it remains below the previous six-month average. In London, property values have shown signs of weakness, with average prices dropping approximately £20,000 from their mid-2025 peak. The government is considering new loan programs to support first-time buyers to maintain market confidence.