UK mortgage approvals slump to seven-month low as housing demand weakens

UK mortgage approvals for residential purchases reached a seven-month low in July as rising interest rates continued to constrain housing demand, new data showed. The figure underscores mounting headwinds facing Britain's property market, where affordability challenges have intensified amid the broader cost-of-living pressures affecting households across the nation.

Net mortgage borrowing also contracted significantly, dropping below the six-month average and indicating reduced activity among both first-time buyers and existing homeowners. The pullback reflects the cumulative impact of elevated lending rates, which have made property acquisition increasingly unaffordable for many potential borrowers.

House prices posted modest annual growth but declined when adjusted for inflation, revealing that nominal price appreciation has failed to keep pace with broader price pressures in the economy. This erosion of real-terms value may further dampen buyer confidence in the months ahead.

In contrast, unsecured consumer borrowing rose during the period, suggesting households are increasingly reliant on credit to fund everyday expenses. The divergence between weakening mortgage demand and strengthening consumer credit underscores shifting financial pressures on British households navigating persistent inflationary conditions and constrained purchasing power.