Mortgage approvals jumped by 800 month-on-month in July despite uncertainty over tax increases in the autumn Budget, latest Bank of England figures show.

Net mortgages totalled 65,400, which was up from the previous month, but remortgages fell by 2,700 to 38,900, the bank’s latest Money and Credit release reveal.

Also, net borrowing of mortgage debt by individuals decreased by £0.9 billion to £4.5 billion in July, compared to a £3.2 billion increase to £5.4 billion in June.

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased for the fifth consecutive month, to 4.28% in July from 4.34% in June. However, the rate on the outstanding stock of mortgages remained at 3.88%, the Bank says.

Industry reaction

The portals

Jason Tebb, President of OnTheMarket, says: “The market appears remarkably steady with approvals for house purchases – an indicator of future borrowing – increasing again in July despite wider political and economic concerns.

“With the rate on newly-drawn mortgages falling again for the fifth consecutive month, while the rate on outstanding mortgage stock remained the same, overall there are signs that affordability challenges continue to ease,” he says.

“Five base rate reductions from the Bank of England in the past year have helped, along with recently relaxed lending rules and easing of criteria, enabling borrowers to take on bigger mortgages.”

Richard Donnell, Executive Director at Zoopla, says: “Mortgage lending for home purchase is up 3% on last year mirroring the steady increase in new sales being agreed, which have recovered over 2025 and lead mortgage approvals data.

“We expect a continued increase in demand for mortgages as sales continue to increase but the drift higher in average mortgage rates and concerns over property taxes at the upper end of the market may reduce activity in the next 1-2 months.”

The industry leader

Nathan Emerson, CEO of Propertymark, says: “Considering the many twists and turns within the wider economy currently, it’s extremely positive to see a further uplift in mortgage approvals.

“The resilience of the housing market is often a direct indicator of consumer confidence and affordability, and it has been reassuring to see forward momentum as the year has progressed.”

The lender

Tomer Aboody, Director at MT Finance, says: “The constant uncertainty as to ‘what next?’ from Rachel Reeves, is likely to result in buyers and sellers adopting a ‘wait and see’ approach.

“The property market fuels the wider economy, so any further increases in tax and costs will have a knock-on impact.”

The agents

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “We find many of our buyers and sellers regard the summer holidays as a time for reflection about their property and return ready to make decisions about whether to move or not.

“This year has proved no exception as shown in these solid mortgage approvals, covering buying aspirations over the past few months, and so are a better indicator of market health than prices.

“As a result, the next quarter’s activity is likely to be strong.”

Simon Gammon, Managing Partner at Knight Frank Finance, says: “Homebuying activity remained resilient through the summer, with approvals for house purchase running just short of the 2019, pre-pandemic average.

“The best fixed-rate mortgages have hovered around 3.7% to 3.8%. Borrowers have adjusted to this level, and many who delayed moving when rates peaked have now decided to act.

“The narrative has shifted in recent weeks, however. A split within the Bank of England’s Monetary Policy Committee, stubborn inflation and wage growth, and relatively robust growth figures have cast doubt on whether the BoE can cut interest rates again this year,” he says.

“Uncertainty around potential tax rises in the upcoming budget has added to the caution.”

The brokers

Mark Harris, CEO at SPF Private Clients, says: “With mortgage approvals continuing to increase, the underlying resilience of the housing market is in evidence.

“The effective interest rate paid on new mortgages fell to 4.28% in July and since then, we have seen some lenders trim their mortgage rates further.

“However, with the rate on the outstanding stock of mortgages holding at 3.88%, affordability remains a concern for many,” he says.

Ben Allkins, Head of Mortgages and Protection at Just Mortgages, says: “While net borrowing slowed in July, it’s encouraging to see another monthly increase in mortgage approvals, albeit only marginal again.

“There’s no question that July marked the usual start of a quieter summer season, although positive movement from lenders in anticipation of the August base rate cut certainly gave brokers a great headline to proactively share with clients and encourage activity,” he says.

“While perhaps not at full steam, we still saw high levels of business activity across all areas of Just Mortgages, with strong demand for valuation requests, buyer registrations and mortgage appointments.”

Mortgage lending on the rise as housing market strengthens