Highest UK Mortgage Approvals in Six Months 

According to data from the Bank of England, UK net mortgage approvals hit a six-month high in July. 65,400 mortgage approvals were recorded by UK lenders, which was an increase of 800 from June’s figures. 

This marked a continued property transaction recovery, following the fluctuations caused by the end of the temporary stamp duty tax break. The stamp duty tax thresholds were reduced in April 2025, which resulted in a surge in property sales as buyers looked to complete before the deadline to avoid the higher stamp duty rates.  

The volume of mortgage approvals in July was the highest since January 2025, when the number was 65,775.  

The continued decline of the Bank of England base rate and falling mortgage interest rates has helped to restore buyer confidence. A further BoE base rate reduction to 4% was announced in August, providing more optimism for UK property buyers. 

Further data from the Bank of England revealed that the ‘effective’ interest rate dropped to 4.28%, the fifth consecutive month of rate reductions. 

Another factor in the increased mortgage approvals is the regulator-led borrowing limit changes for first-time buyers. HSBC UK has just announced a 5.5 times salary cap for mortgages for first-time buyers who meet their specified criteria. Many other lenders are also offering increased loan-to-income multiple caps to help more people onto the property ladder. 

UK House Prices Fall  

Meanwhile, Nationwide released the latest data on average house prices, which signified a 0.1% month-on-month decrease. The average house price in the UK dropped to £271,079, which chief economist at Nationwide, Robert Gardner attributed to higher borrowing costs. 

“House prices are still high compared with household incomes, making raising a deposit challenging for prospective buyers, especially given the intense cost of living pressures in recent years.” 

“Combined with the fact that mortgage costs are more than three times the levels prevailing in the wake of the pandemic, this means that the cost of servicing a mortgage is also a barrier for many.”