Mortgage Approvals Recover Slightly in June but Remain Below Average

Mortgage Approvals Recover Slightly in June but Remain Below Average

Mortgage approvals recovered slightly in June, but remained below recent levels as higher borrowing costs continued to weigh on buyer confidence.

Bank of England Money and Credit data showed that net mortgage approvals for house purchase rose to 58,200 in June, up from 56,600 in May. Although that was an improvement, approvals were still below the previous six-month average of around 61,400.

The figures suggest the housing market has stabilised slightly after the sharp fall seen in May, but has not returned to the stronger activity recorded earlier in the year. Buyers are still active, but many appear to be more cautious as mortgage rates, affordability checks and wider economic uncertainty affect decisions.

What the June approval figures show

Mortgage approvals are a useful early indicator because they show lending decisions before many purchases complete. When approvals rise, it can suggest more buyers are moving forward. When approvals fall or remain below average, it can point to softer demand ahead.

June’s increase from 56,600 to 58,200 shows that the market did not continue falling at the same pace as May. That is positive, but the level is still not especially strong. Remaining below the six-month average suggests buyer demand is still being held back.

This is a recovery, but only a partial one.

For more detail, read why a Mortgage in Principle matters when house hunting.

Why approvals remain under pressure

Mortgage approvals can be affected by several things at once. Higher mortgage rates can reduce borrowing power, affordability checks can become harder to pass, and buyers may delay applications if they are unsure where rates or house prices are heading.

A buyer who expected to borrow comfortably earlier in the year may now find that the same property creates a tighter monthly payment. That can lead to lower offers, smaller search budgets, or a decision to wait.

Lenders are also assessing the whole case, not just income. Debts, deposit size, loan-to-value, credit history, childcare, car finance and student loan deductions can all affect the amount a borrower may be offered.

For more detail, read how mortgage affordability is calculated by lenders.

Net mortgage borrowing jumped in June

The same Bank of England release showed that net borrowing of mortgage debt by individuals rose to £7.7bn in June, up from £3.3bn in May. That was above the previous six-month average of £4.9bn.

That rise is useful context, but it should not be confused with a full recovery in buyer demand. Mortgage borrowing reflects completed lending and can lag behind earlier approval decisions. It may partly reflect transactions already in progress rather than a fresh surge in new buyer confidence.

The mixed picture is important. Approvals improved only slightly, while lending jumped more sharply. That suggests the market may still be working through earlier activity while new demand remains more cautious.

For more detail, read how long does a mortgage application take?

Buyers are still being careful

The June data fits with a housing market where buyers are not absent, but are being more selective. Mortgage rates remain a key pressure point, and buyers are likely to be paying closer attention to monthly costs before committing.

This may mean fewer speculative offers, more negotiation and more careful property searches. Buyers may also be more likely to check mortgage options earlier rather than relying on rough calculator figures.

That is sensible. A market with higher mortgage costs rewards preparation. Buyers who know their budget, deposit, documents and likely borrowing position are usually better placed than those who wait until after making an offer.

For more detail, read what factors affect how much you can borrow for a mortgage?

What this means for sellers

For sellers, below-average approvals suggest that buyer demand may be thinner than it looked earlier in the year. That does not mean homes will not sell, but it may mean sellers need to be more realistic on price and more responsive to serious buyers.

If mortgage approvals are lower, fewer buyers may be able or willing to proceed at higher price points. Sellers who price too far above local affordability may find that viewings slow or offers come in below expectations.

A property that is priced sensibly, presented well and supported by clear information may still attract interest. But the market is less forgiving when mortgage costs are high.

First-time buyers may feel the pressure most

First-time buyers can be especially sensitive to mortgage-rate changes because they often rely on higher loan-to-value borrowing and have less equity to support the purchase.

Even when approvals improve slightly, the affordability challenge can remain difficult. Rent, deposit saving, student loan deductions, car finance, credit-card balances and moving costs can all affect how much a first-time buyer can realistically borrow.

A Mortgage in Principle can help set a realistic search range, but buyers should remember that it is not a full mortgage offer. The final application still depends on documents, affordability, credit checks and the property valuation.

For more detail, read first-time buyer mortgages explained.

Remortgaging remains part of the wider picture

Although this approval data focuses on house purchases, the wider mortgage market is also shaped by remortgaging. Many homeowners are still coming to the end of older fixed-rate deals and need to decide whether to remortgage, take a product transfer or move onto a follow-on rate.

That matters because remortgage pressure can affect wider housing activity. Some homeowners may delay moving because their next mortgage would be more expensive. Others may stay put and focus on securing a new deal.

The result is a market where purchase activity and remortgage activity can move differently. Buyers may be cautious, while existing homeowners still need to make mortgage decisions.

For more detail, read what happens at the end of a fixed-rate mortgage?

Why lender choice still matters

In a cautious market, lender choice can make a major difference. A borrower who is declined by one lender or offered less than expected may still fit another lender’s criteria.

This can be especially relevant for people with variable income, self-employed income, commission, bonuses, car finance, credit-card debt, past credit issues or a smaller deposit.

The June approval figures show that applications are still being approved, but not at the stronger pace seen earlier in the year. That makes it even more important to avoid weak or poorly matched applications.

For more detail, read how getting a mortgage without a broker works.

What buyers should do now

Buyers should treat the June figures as a sign of a cautious market rather than a reason to stop moving. Approvals are still happening, but borrowers need to be realistic about affordability and lender criteria.

Before making offers, buyers should check borrowing power, get a Mortgage in Principle, prepare documents, review credit files and understand how existing debts affect the application. It is also sensible to compare mortgage products carefully, especially where rates or monthly payments are close to the edge of comfort.

A slight recovery in approvals is welcome, but it does not remove the need for careful preparation.

For more detail, read how to improve your chances of mortgage approval.

Source

This article is based on the Bank of England’s Money and Credit release for June 2026. The Bank said net mortgage approvals for house purchase increased to 58,200 in June from 56,600 in May, but remained below the previous six-month average of around 61,400. It also said net borrowing of mortgage debt by individuals rose to £7.7bn in June from £3.3bn in May.

Bottom line

Mortgage approvals recovered slightly in June, but the improvement was modest.

The rise from May suggests the market stabilised after a weaker month, but approvals remained below the recent six-month average. That shows buyers are still active, but higher mortgage rates and affordability pressure continue to affect decisions.

For buyers, the practical message is to prepare properly before making offers. For sellers, realistic pricing matters. For remortgagers, the wider rate environment still needs close attention.

The mortgage market is moving, but it is not easy. In this kind of market, clear affordability, suitable lender choice and realistic expectations matter more than ever.

👉 Check your mortgage position before making a full application.