Overview
- Bank of England data show mortgage approvals for house purchases fell to about 56,200 in May, the weakest reading since December 2023 and down from roughly 66,000 in April.
- Approvals for remortgaging with a different lender fell sharply to about 33,300 in May from 51,200 in April, as many mortgage deals were withdrawn from the market.
- Analysts link the slowdown to higher swap rates that followed the late‑February escalation of the US‑Israel war with Iran, which pushed up energy and inflation expectations and lifted mortgage pricing.
- The effective interest rate on newly drawn mortgages was reported around 4.22% in May, but swap rates have eased in recent weeks and some banks and building societies have started cutting headline fixed mortgage rates.
- Household balance sheets show mixed signals: consumer credit was broadly unchanged at about £1.7bn, net credit‑card borrowing fell from £800m to £600m, and deposits rose by £5.4bn while ISA inflows slowed from April.