UK Mortgage Approvals Hit 18-Month Low as Borrowing Costs Weigh on Demand

UK mortgage approvals for home purchases dropped to their lowest point since January 2024 in July, reflecting weakening demand in the housing market. Rising borrowing costs have been identified as a key factor behind the decline. Net mortgage borrowing also fell sharply, dipping below its six-month average. Although house prices recorded modest annual growth, they declined in real terms once inflation was factored in. In contrast, unsecured consumer borrowing increased, suggesting households are relying more heavily on credit for day-to-day expenses.