Net borrowing also fell sharply in May, indicating mounting affordability pressure on prospective buyers
Mortgage approvals for house purchases fell to their lowest level since December 2023 in May, dropping to 56,200 from 66,000 in April, according to Bank of England data. The figure was below the six-month average of 63,300 and marked the weakest reading in 17 months.
Net borrowing of mortgage debt by individuals also declined, falling to £2.9 billion in May from £4.4 billion in April. The figure was below the previous six-month average of £5.1 billion and the lowest since May 2025, when net borrowing stood at £1.9 billion. The annual growth rate for net mortgage lending edged up slightly to 3.4% in May from 3.3% in April.
Approvals for remortgaging with a different lender fell sharply, dropping to 33,300 in May from 51,200 in April.
The latest Bank of England Money and Credit figures also showed a drop in secured gross lending to £27.1 billion in May from £27.4 billion in April, though it remained above the six-month average of £25.3 billion. Repayments rose to £22.9 billion from £22.6 billion the previous month, exceeding the six-month average of £19.9 billion.
The effective interest rate on newly drawn mortgages rose to 4.22% in May from 4.08% in April. The rate on the outstanding stock of mortgages held steady at 3.92%.
Chart: Mortgage approvals
Seasonally adjusted, thousands
Source: Bank of England
"A decline in net mortgage borrowing and a decrease in mortgage approvals reflects the continued caution many households are exercising when making significant financial commitments," said Nathan Emerson (pictured right), chief executive of industry body Propertymark. "Affordability remains a key consideration for many buyers, and any uncertainty around household finances or borrowing costs can influence purchasing decisions.
"Despite this, there remains underlying demand from people looking to move home. Propertymark members continue to see committed buyers in the market, and greater certainty around lending conditions, alongside increased housing supply, will be essential to restoring confidence and supporting a healthy level of housing market activity in the months ahead."
For Louise Apollonio (pictured right), sales and distribution director of retail mortgages at specialist lender Shawbrook, wider geopolitical challenges have led mortgage approvals for house purchases to decrease, demonstrating that buyers are prioritising caution over purchases.
"This sentiment is expected to continue over the next few months, as hopes that interest rates will fall this summer are being tempered, with expectations that the Bank of England base rate will hold at 3.75% for the foreseeable future.
"While lenders have generally been reducing rates in recent months, borrowers should remain mindful that this picture could shift."
Mark Harris (pictured right), chief executive of mortgage broker SPF Private Clients, agreed that the drop in mortgage approvals to their lowest level since December 2023 illustrated the concerns and difficulties facing both buyers and sellers.
He also advised borrowers to secure any product that appealed to them, warning that market volatility meant nothing should be taken for granted.
"Those looking to buy this year should consider speaking to a broker, as they will be able to show you the possible routes to homeownership, even in difficult economic times," Apollonio added.
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