Mortgage Approvals Plummet to Lowest Level Since June 2024

The number of mortgage approvals to home buyers in the United Kingdom fell to its lowest level in a year-and-a-half in December 2025. According to figures from the Bank of England, there were just 61,013 approvals for house purchases, a decline from 64,072 in November. This figure represents the lowest monthly total since 60,920 approvals were recorded in June 2024.

Financial and property experts attribute this downturn to lingering uncertainties surrounding the autumn Budget of the previous year. Thomas Pugh, chief economist at RSM UK, commented on the figures, stating, “The drop in mortgage approvals to 61,013 is consistent with weak momentum in the housing market in the fourth quarter of 2025. This decline is unsurprising given the uncertainty generated by the Budget.”

Looking ahead, Pugh expressed optimism, indicating that with clarity around property taxes and recent interest rate cuts, the housing market could regain momentum. He noted that there is likely to be pent-up demand due to the previous quarter’s weakness.

Expert Insights on Future Trends

The sentiment among economists remains cautiously optimistic. Rob Wood, chief UK economist at Pantheon Macroeconomics, suggested that mortgage approvals might hit a low point in December or January before beginning to recover throughout 2026. Similarly, Frances McDonald, director of research at Savills, predicted stability for both market activity and prices throughout the year due to lower mortgage rates and reduced chances of further changes to the property tax system.

The Bank of England also reported that approvals for remortgaging increased by 1,600 to reach approximately 38,400 approvals in December. Notably, this figure only accounts for remortgaging with a different lender. Mark Harris, chief executive of SPF Private Clients, highlighted that lenders are eager to extend credit. He noted, “As we move towards spring, the good news for borrowers is that lenders are keen to lend and have the funds available to do so.”

Broader Economic Context

The report also touched on consumer credit trends. The annual growth rate for consumer credit remained steady at 8.2% in December, unchanged from November. Within this, credit card borrowing saw an increase, rising to 12.4% from 12.1%, marking the highest level since January 2024.

Households deposited an additional £4.8 billion in banks and building societies in December, a decrease from £8.8 billion in November. Mark Hicks, director of active savings at Hargreaves Lansdown, explained that seasonal spending during Christmas typically impacts savings rates, and he anticipates further withdrawals as people prepare for tax payment deadlines.

Business borrowing also saw a shift, with UK non-financial businesses borrowing £1 billion from banks in December, a considerable drop from £6.2 billion in November.

In terms of housing transactions, the HM Revenue and Customs (HMRC) reported approximately 100,440 home sales in December, reflecting a 5% increase from December 2024, but a slight dip of less than 1% compared to November 2025.

Mortgage expert Karen Noye from wealth manager Quilter noted that both the Bank of England’s Money and Credit statistics and HMRC’s property transaction data suggest that the housing market is currently in a holding pattern. Nicky Stevenson, managing director at Fine & Country, observed that agents are experiencing solid inquiry levels, especially when sellers adhere to realistic pricing strategies.

Despite the challenges, she noted that buyers are moving quickly once they find suitable properties, which is helping to sustain transaction levels during this traditionally slower period for real estate.