Mortgage Approvals Data Shows Buyers Are Still Proceeding Cautiously

Mortgage approvals fall as buyers weigh rates and affordability

UK mortgage approvals fell in the latest Bank of England data, offering a fresh indication that buyers are remaining cautious as they balance mortgage rates, affordability and wider economic uncertainty.

The Bank recorded 56,100 net mortgage approvals for house purchases in July 2026, down from 58,200 in June and below the previous six-month average of around 60,800.

At the same time, approvals for remortgaging with a different lender edged higher to 34,500, from 34,100 in June.

The figures suggest activity remains subdued rather than showing a clear acceleration in buyer demand. But mortgage approvals are a leading indicator, not a measure of completed house sales — and they say relatively little about whether any individual borrower will be approved.

What do mortgage approval figures actually measure?

The Bank of England's house-purchase series measures mortgage approvals net of cancellations.

That makes it useful for tracking whether prospective buyers are progressing far enough through the process to secure mortgage finance.

It can therefore provide an early indication of future housing activity.

But an approval is not the same thing as a completed purchase.

Between obtaining mortgage finance and collecting the keys, a transaction can still be affected by:

• surveys;
• property valuations;
• legal enquiries;
• property chains;
• mortgage-offer expiry;
• changes in the buyer's circumstances; and
• the sale falling through.

Our guide to what can delay mortgage completion explains why even a buyer with a mortgage offer can still face obstacles before the property actually changes hands.

A Mortgage in Principle is not a mortgage approval

It is also important to distinguish the Bank of England's mortgage approval figures from the Mortgage in Principle many buyers obtain before viewing or offering on a property.

A Mortgage in Principle — also known as an Agreement in Principle, AIP or Decision in Principle — is an early indication of what a lender may be prepared to lend.

It can help buyers establish a realistic property budget and demonstrate to an estate agent that they have considered their finances.

But it is not a guaranteed mortgage offer.

A full application can still require:

• income evidence;
• bank statements;
• credit checks;
• affordability assessment;
• deposit verification;
• underwriting; and
• a satisfactory property valuation.

Our guide to what a Mortgage in Principle means explains the difference between an early lending indication and a full mortgage offer.

Why falling approvals matter

Mortgage approvals can provide a useful snapshot of buyer confidence.

If approvals rise consistently, it can suggest more households are willing and able to progress with purchases.

If they fall, possible explanations can include:

• higher borrowing costs;
• weaker affordability;
• economic uncertainty;
• buyers waiting for mortgage rates to change;
• fewer properties coming to market; or
• temporary changes in activity around tax or policy deadlines.

One month should therefore be treated cautiously.

Mortgage activity can be volatile, and a short-term fall does not automatically signal a housing-market downturn.

The July figures nevertheless sit below recent averages and suggest buyers were not rushing back into the market.

Mortgage borrowing also slowed

The wider Bank of England figures reinforce that picture.

Net borrowing of mortgage debt fell to £4.3 billion in July, down from £7.7 billion in June.

Gross secured lending also eased to £25.9 billion.

Meanwhile, the effective interest rate actually being paid on newly drawn mortgages increased from 4.35% in June to 4.45% in July.

That last figure is particularly useful because advertised mortgage rates and the rates borrowers eventually pay are not always the same thing.

Borrowers choose different products, loan-to-value bands, terms and fee structures, which means movements in headline best-buy rates do not immediately translate into the same change across all new lending.

Your own mortgage application matters more than the national number

A national approvals figure of 56,100 cannot tell an individual buyer whether their mortgage will be accepted.

Lenders assess the borrower in front of them.

Factors can include:

• income;
• employment status;
• regular expenditure;
• existing debts;
• credit history;
• deposit;
• loan-to-value;
• mortgage term;
• property type; and
• the lender's own affordability criteria.

Our guide to how much you can borrow for a mortgage explains why two households with similar salaries can receive very different borrowing figures.

The lender is assessing whether the mortgage appears sustainable, not simply whether the wider market is busy.

Loan-to-value still matters

Deposit size remains one of the important parts of that assessment.

Loan-to-value, or LTV, compares the size of the mortgage with the value of the property.

Someone buying a £250,000 property with a £25,000 deposit would need a £225,000 mortgage, giving an LTV of 90%.

A larger deposit could move the borrower into a lower LTV band and potentially open access to different mortgage products or rates.

Our guide to loan-to-value and why it matters explains how deposit size can influence pricing, availability and lender risk.

But a large deposit does not guarantee approval.

Income and affordability still have to support the mortgage.

Rates are only one part of affordability

Mortgage-rate headlines naturally receive most of the attention, but borrowers should not judge a product using the interest rate alone.

A low advertised rate may come with a substantial product fee.

Another mortgage with a slightly higher interest rate but no fee could potentially cost less over the period the borrower expects to keep it.

The comparison should consider:

• monthly payment;
• product fee;
• valuation costs;
• legal costs;
• cashback;
• early repayment charges;
• overpayment rules; and
• total cost over the deal period.

Our guide to mortgage fees and the true cost of borrowing explains why the lowest headline rate is not necessarily the cheapest mortgage.

Lenders may test affordability beyond today's payment

Borrowers can also find that the mortgage they feel comfortable paying is not necessarily the amount a lender is willing to approve.

Mortgage affordability assessments can consider whether repayments would remain manageable if circumstances became less favourable.

That can include looking at:

• higher future payments;
• the end of an introductory deal;
• household expenditure;
• existing debts;
• variable income; and
• overall financial resilience.

Our guide to how mortgage stress tests work explains why lenders sometimes offer less than an online calculator or simple income multiple might suggest.

This is particularly important for buyers trying to borrow close to their maximum affordability.

A mortgage offer can still have conditions

Even after underwriting has been completed, a mortgage offer should not be treated as completely unconditional.

Mortgage offers normally have an expiry date and may contain requirements that have to be satisfied before funds are released.

A material change in circumstances can also matter.

For example, taking out a new personal loan or car finance between mortgage offer and completion could alter the borrower's affordability position.

Changing jobs, losing income or accumulating additional credit may also require the lender to reassess the application.

That is why buyers are generally better avoiding unnecessary new borrowing while a property transaction is progressing.

Our guide to improving your chances of mortgage approval covers credit, documents, deposit preparation and affordability before an application is submitted.

What do the latest figures tell buyers?

The latest approvals numbers are useful because they show the direction in which mortgage activity is moving.

July's fall from 58,200 to 56,100 suggests house-purchase demand remained relatively restrained.

It does not mean buyers cannot get mortgages.

Nor does it mean house prices or transaction numbers must subsequently fall.

Mortgage approvals are one part of a much larger housing-market picture that includes interest rates, wages, property supply, affordability, consumer confidence and lender competition.

For somebody actually planning to buy, those national trends matter less than being properly prepared.

That means understanding:

• how much you can realistically borrow;
• how much deposit you have;
• what LTV band that creates;
• your monthly budget;
• the total cost of different products;
• your credit position; and
• whether the property itself is likely to satisfy the lender.

The Bank of England figures can tell us something about the market.

They cannot tell you whether your mortgage will be approved.

For more guidance on affordability, mortgage applications and choosing a product, visit our Mortgages Explained section.

Source: Bank of England, Money and Credit – July 2026, published 1 September 2026.