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Mortgage Approvals Hit 18-Month Low as Housing Market Cools
30 Jan
Summary
- December saw the lowest mortgage approvals for home buyers in 18 months.
- Experts anticipate a housing market rebound due to budget certainty and rate cuts.
- Consumer credit growth remained steady, with credit card borrowing increasing.
Mortgage approvals for house purchases in December fell to 61,013, marking an 18-month low and a decrease from the previous month's 64,072 approvals. This downturn reflects a sluggish housing market in the fourth quarter of 2025, largely due to budget uncertainties. Experts predict a market resurgence in 2026, as financial conditions stabilize and interest rates are expected to decline further.
Lenders have been reducing mortgage rates, and remortgaging approvals saw an increase, indicating borrowers are seeking better deals. Consumer credit growth remained stable, although credit card borrowing reached its highest point since January 2024. Household savings also saw a dip in December, influenced by seasonal spending and tax payments.
Business borrowing from banks and building societies also decreased significantly in December. Despite the current holding pattern, anecdotal evidence suggests solid buyer interest and increased property choice. As market conditions improve with lower rates and stable tax policies, transaction levels are expected to be sustained throughout the year.
