UK mortgage approvals drop 15% in May, lowest since 2023

The number of mortgages approved for home purchases in the United Kingdom fell sharply in May to its lowest level in two and a half years, according to data released by the Bank of England on Monday, June 29, 2026. The figures indicate a significant loss of momentum in the housing market, which experts attribute to rising borrowing costs and economic uncertainty.

Approvals for house purchases dropped to 56,205 in May, a decline of nearly 15 percent from April's figure of 66,034. This reading was the weakest since December 2023 and fell well below both the previous six-month average of approximately 63,300 and economists' forecasts. The data is seen as a leading indicator of future housing market activity, as approvals typically precede completed sales by several weeks.

Industry analysts pointed to a spike in mortgage rates as a primary cause for the slowdown. They linked the increase to financial market volatility stemming from the ongoing conflict involving the U.S., Israel, and Iran, which began in late February. This uncertainty pushed up inflation expectations and caused lenders to withdraw some deals and raise fixed rates. The effective interest rate on newly drawn...