Mortgage approvals for house purchases fell to 56,200 in May, down from 66,000 in April – the lowest level since December 2023, according to figures released today by the Bank of England (BoE).

The BoE’s latest Money and Credit data shows May’s figure was below the average of 63,300 over the previous six months and the lowest since December 2023, when there were 52,600 approvals.

Approvals for remortgaging – which only capture borrowers switching to a different lender – also fell to 33,300 in May from 51,200 in April.

Net borrowing of mortgage debt also decreased to £2.9bn in May, from £4.4bn in April. This was below the previous six-month average of £5.1bn and the lowest since May 2025 (£1.9bn).

Secured gross lending also decreased slightly in May to £27.1bn, from £27.4bn in April. Yet this remained above the six-month average of £25.3bn.

By contrast, repayments increased slightly in May to £22.9bn, from £22.6bn in the previous month. This was above the six-month average of £19.9bn.

Meanwhile, the annual growth rate for net mortgage lending edged up to 3.4% in May, from 3.3% in April.

While the interest rate on newly drawn mortgages increased to 4.22% in May, from 4.08% in April.

Volatile funding rates

Gareth Lewis, deputy chief executive officer of specialist lender MT Finance, said;

“These numbers are a sign of what is happening at this moment in time. At the beginning of the year, approval numbers started to pick up quite nicely, which is why April was a much more impressive month compared with May as that came through in the wash.

“We are now seeing the ramifications of the interest rate environment becoming unstable again and the impact this is having on transactions.

“There urgently needs to be some stimulus for the housing market, with the government needing to do something to encourage transactions and activity, which will also benefit the wider economy.

“Talk of the removal of Stamp Duty has been mooted but it remains to be seen whether that would make a real difference.

“Volatile funding rates are the real issue at the moment; while everything pointed towards a lower interest rate environment this year, the impact of war in the Middle East has since changed this outlook.”

Political uncertainty

Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chairman, said: “Mortgage approvals are arguably the most important of all the housing market data, as they are forward, rather than backward facing, so are a reliable indicator of future activity.

“On the ground, we are finding it is not just the numbers which are down, but the time genuine buyers are taking before playing their mortgage offer card.

“Concerns remain about the direction of travel for mortgage rates and the cost of living which is delaying decision making as the war in Iran drags on.

“Looking forward, we expect more of the same at best particularly now that political uncertainty is adding to this caution.”