Mortgage approvals soften in August - BoE
By Abigail Townsend
Date: Monday 29 Sep 2025
(Sharecast News) - Mortgage approvals dipped in August, official data showed on Monday, despite the cost of borrowing coming down.
According to the Bank of England's latest money and credit report, net mortgage approvals for house purchases decreased by just under 500 last month, to 64,680.
There were also around 900 fewer remortgage approvals.
Net borrowing of mortgage debt also eased, by £0.2bn to £4.3bn, although that was less steep than the £0.9bn decline seen in July.
At the same time, the effective interest rate on newly drawn mortgages fell for a sixth consecutive month, to 4.26% from 4.28% in July.
The rate-setting Monetary Policy Committee has cut interest rates three times so far this year, including a 25 basis point reduction in August.
However, at 4% they remain high by historically standards. Inflation also remains stubbornly above target, with the consumer price index at 3.8% and food prices soaring 5.1%, while economic growth is sluggish, all of which is weighing on both mortgage affordability and wider consumer sentiment.
The monthly money and credit report also showed borrowing of consumer credit by individuals remained flat at £1.7bn in August.
Borrowing on credit cards dipped to £0.7bn from £0.8bn, offsetting a £1.0bn rise, to £0.9bn, in other forms of consumer credit, including car dealership finance and personal loans.
In contrast, household deposits with banks and buildings societies increased by £5.4bn.
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